Wall Street closed lower on Friday, pulled down by tech and discretionary stocks. Investor mood was downbeat on President Trump’s recommendations of a major tariff hike on European goods. All three benchmark indexes closed the session in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.6%, or 256.02 points, to close at 41,603.07. Twenty components of the 30-stock index ended in negative territory, while 10 ended in positive.
The tech-heavy Nasdaq Composite fell 188.53 points, or 1%, to close at 18,737.21.
The S&P 500 lost 39.19 points, or 0.7%, to close at 5,802.82. Seven of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) declined 1%, 0.9% and 0.5%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 1.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 9.9% to 22.29. A total of 17.67 billion shares were traded on Friday, slightly lower than the last 20-session average of 17.73 billion.
Trump Threatens to Slap a 50% Tariff Hike on European Goods
On Friday, U.S. President Donald Trump kicked the hornet’s nest yet again by suggesting on his social media platform that the United States must push for 50% tariffs on European goods. On the news, there was a broadbase fall in U.S. stock indexes and European shares, while the dollar weakened. U.S. Treasury yields also came down on fears about the impact of these proposed tariffs on economic growth.
Trump proposed a 50% tariff on European Union imports, citing what he perceives as longstanding unfair trade practices by the EU. The President claimed that while the EU benefits greatly from access to the U.S. market, it imposes a range of both tariff and non-tariff barriers on American goods, particularly in sectors such as automobiles and agriculture. He has also expressed frustration with EU regulations and the value-added tax (VAT) system, which he argues puts American exports at a disadvantage. According to Trump, these measures function as hidden trade barriers that make it harder for U.S. companies to compete in European markets.
The markets reacted adversely, as it has consistently done on each occasion that the tariff war has played out. In response to the market turmoil, President Trump extended the deadline for imposing the 50% tariffs on EU imports from June 1 to July 9, 2025, following a conversation with European Commission President Ursula von der Leyen. This decision provided temporary relief to the markets.
Consequently, shares of Intel Corporation INTC and NIKE, Inc. NKE fell 2.4% and 2.1%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Weekly Roundup
Markets remained volatile last week, adversely impacted by renewed trade tensions and rising bond yields. President Trump's threats of tariffs on European Union goods and levies on foreign-made iPhones, particularly affecting Apple, led to significant market declines. The S&P 500, Dow Jones, and Nasdaq each slid more than 2.6%, 2.5% and 2.5%, respectively, for the week. Investor concerns were further heightened by a spike in U.S. Treasury yields, with the 30-year yield surpassing 5% for the first time since 2023, amid fears of increasing federal deficits.
Economic Data
Per the U.S. Census Bureau and the Department of Housing and Urban Development, New Home Sales increased to 743,000 units in April. The number for March was revised down to 670,000 from the previously reported 724,000.
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Intel Corporation (INTC): Free Stock Analysis Report NIKE, Inc. (NKE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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