Wall Street’s main indexes slumped on Friday after U.S. President Donald Trump recommended 50% tariffs on the European Union, while Apple tumbled after he warned it would have to pay tariffs if iPhones were not manufactured in the United States.
“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Trump said in a post on Truth Social.
Apple touched a two-week low and was down 2.5% after Trump said in a separate post before this that the iPhone-maker would be subject to 25% tariffs if its phones sold in the U.S. were not made within the country’s borders.
“We believe that this morning’s social media posts about a 50% tariff on the EU are primarily a negotiating tactic,” Barclays analysts led by Ajay Rajadhyaksha said in a note.
“But today’s developments, including the posts about I?-?phones, do highlight that the US has not turned the page on tariffs and that more trade policy volatility lies ahead,” the note said.
At 11:18 a.m. ET, the Dow Jones Industrial Average fell 330.17 points, or 0.79%, to 41,526.96, the S&P 500 lost 54.98 points, or 0.94%, to 5,787.03, and the Nasdaq Composite lost 229.40 points, or 1.20%, to 18,697.82.
Trump warns Apple of 25% tariffs if iPhones not made in US
Wall Street’s “fear gauge”, the CBOE Volatility Index , spiked to a more than two-week high and was last at 22.14 points.
Ten of the 11 S&P sub-sectors fell, with consumer discretionary and information technology being the worst hit.
Most megacap and growth stocks dropped, with Amazon and Nvidia declining more than 1% each.
A gauge for semiconductor stocks fell more than 2%, while carriers including American Airlines shed about 2%.
Deckers Outdoor slumped almost 20% after the maker of UGG boots forecast first-quarter net sales below estimates and said it would not provide annual targets.
Sportswear giant Nike also dropped, falling 2.2%.
U.S. Treasury Secretary Scott Bessent said Trump did not believe that the EU’s trade offers were of sufficient quality. He also said he hoped the threat of fresh tariffs would “light a fire under the EU” in negotiations.
All three main stock indexes were set for sharp weekly losses as worries about mounting debt gripped markets. Moody’s downgrade of the U.S. credit rating late last week had sparked the concerns initially.
The Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill that would enact much of Trump’s policy agenda by a narrow margin on Thursday.
Long-dated government bond yields eased further after this week’s spike as investors moved to safer assets, with those on the 10-year note down 3.4 basis points to 4.51%.
Trading activity is expected to thin heading into a long weekend as markets will be shut on Monday for Memorial Day.
Declining issues outnumbered advancers by a 2.54-to-1 ratio on the NYSE and by a 2.25-to-1 ratio on the Nasdaq.
The S&P 500 posted three new 52-week highs and seven new lows, while the Nasdaq Composite recorded 24 new highs and 82 new lows.
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