Pre-Markets Drop Hard on New Trump Tariff Talk

Friday, May 23, 2025

Pre-market futures are down precipitously this morning as President Trump amps up the rhetoric on his global trade war. While advocates of his plan applaud the hard-line approach, as it promises to bring a new economic reality to the U.S. and its trading partners, investors are back to frowning at the oceans of uncertainty they are once again directly faced with.

The Dow is currently down -560 points, roughly -1.3%, while the S&P 500 is -90, -1.5%. The Nasdaq, which has been reinvigorated by recent AI-related growth items, has fallen -400 points, -1.9%, and the small-cap Russell 2000 is -45, -2.1%. It was only earlier this week we were putting in top trading levels for the past month. It may take some major trade deals to turn this back around. 

Trump is warning Apple AAPL will be facing additional +25% tariffs on iPhones made overseas — whether in China as they are currently or India, as Apple CEO Tim Cook has proposed — unless they are produced here in the U.S. Employing an American workforce to produce iPhones is, stated mildly, not in the cards for the company. Thus, the -3.5% drop in AAPL stock this morning adds to its -19% loss year to date.

Not content with going on the offensive against one of America’s most successful companies, the president also turns his attention to the European Union (EU), on which he now proposes a +50% tariff on imports from Europe. The EU is a bigger trading partner with the U.S., with currently a $160 billion trade surplus. This is now being challenged.

All of this, of course, comes ahead of a three-day holiday weekend in the U.S.: Memorial Day is this Monday, when markets will be closed. A week from today, we’ll see a big Personal Consumption Expenditures (PCE) report — the Fed’s preferred gauge on monthly inflation. Also next week will bring us quarterly earnings from NVIDIA NVDA, the most successful chipmaker on the planet. (You can see the full Zacks Earnings Calendar here.)

After today’s opening bell, New Home Sales for April are expected to wane back below +700K (+724K in March, to be specific) to +695K. A month ago, new home sales were seeing the most business in the South, while the Northeast fell back by -22%. In April, 30-year fixed mortgage rates averaged +6.88%.

We wish you all a happy and safe Memorial Day weekend, where we keep in mind those who sacrificed their lives and livelihoods on behalf of defending our nation. See you next week.

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