Stocks Drop Amid Trade Tension Surge

**Trump** Tariff Threats Trigger Market Jitters

Wall Street closed lower today as trade anxieties spiked; **Donald Trump’s** renewed tariff threats against Canada dragged down the S&P 500, escalating concerns around U.S. trade policy and broader economic stability.

Tariff Escalation

**Trump** intensified trade pressures late Thursday, announcing a 35% tariff on Canadian imports starting next month, and plans for widespread 15% to 20% tariffs targeting most trading partners.

The S&P 500 retreated from its record high following **Trump’s** imposition of 50% tariffs on Brazil and the EU bracing for potential new tariff details.

“The increased rhetoric around tariffs, what we’ve seen this week regarding Brazil and Canada, is certainly elevating the anxiety level,” stated **Michael James**, an equity sales trader at Rosenblatt Securities. “People had become a little more accustomed to the lack of negative tariff headlines, and we’ve kind of been reminded that the tariff picture is still there.”

According to recent data, trade policy uncertainty is negatively correlated with manufacturing growth (Federal Reserve, 2019).

Notable Movers

**Nvidia** shares increased by 0.5%, reaching a record high and boosting its market value to $4.02 trillion.

Drone manufacturers AeroVironment and Kratos Defense & Security Solutions saw their stocks jump approximately 11% following U.S. Defense Secretary **Pete Hegseth’s** order to boost drone production and deployment.

Market Performance

The S&P 500 fell by 0.33%, concluding the session at 6,259.75 points.

The Nasdaq decreased by 0.22% to 20,585.53 points, while the Dow Jones Industrial Average dropped 0.63% to 44,371.51 points.

Trading volume was relatively light, with 15.4 billion shares changing hands, compared to the 20-day average of 18.3 billion shares.

For the week, the S&P 500 declined 0.3%, the Dow shed approximately 1%, and the Nasdaq edged down 0.1%.

Year-to-date, the S&P 500 is up approximately 6%.

Earnings Season Ahead

Investors are shifting focus to the upcoming second-quarter reporting season, particularly how **Trump’s** fluctuating tariffs are impacting major U.S. corporations. Key companies like JPMorgan, Netflix, and Johnson & Johnson are set to report results next week.

Analysts anticipate a 5.7% year-over-year increase in S&P 500 companies’ second-quarter earnings, driven by tech sector gains but offset by profit declines in energy, consumer staples, and consumer discretionary sectors, according to LSEG I/B/E/S.

“We believe expectations are a bit low for S&P 500 earnings. Much of the second quarter was marked with tariff and trade issues and that may have caused some dislocations in earnings,” commented **Michael Landsberg**, chief investment officer at Landsberg Bennett Private Wealth Management.

Individual Stock Highlights

**Levi Strauss** & Co experienced an 11% surge after raising its annual revenue and profit forecasts, exceeding quarterly estimates.

**Meta Platforms** shares decreased by 1.3% following reports that the company is unlikely to modify its pay-or-consent model, elevating the risk of fresh EU antitrust charges and substantial daily fines.

**Kraft Heinz** closed 2.5% higher after the Wall Street Journal reported that the company is considering breaking itself up due to ongoing weakness in demand for its higher-priced products.

Across the U.S. stock market, declining stocks outnumbered rising stocks by a ratio of 2.8 to 1.

The S&P 500 registered 12 new highs and 4 new lows, while the Nasdaq recorded 58 new highs and 43 new lows.