Key Takeaways
- Major U.S. stock indices experienced significant declines on Friday, with the S&P 500 falling 2.73%, the NASDAQ dropping 3.54%, and the Dow Jones down 1.87%, largely due to renewed U.S.-China trade tensions.
- Sebastien Lecornu has been re-appointed as France's Prime Minister, tasked by President Emmanuel Macron with forming a new government and urgently addressing the country's public finances and political instability.
- S&P Global Ratings upgraded Egypt's long-term sovereign credit rating to 'B' from 'B-', assigning a stable outlook, citing benefits from the nation's flexible exchange rate policy and economic reforms.
- U.S. bank deposits saw an increase, rising to $18.522 trillion from $18.421 trillion in the prior week.
Global financial markets concluded the week with significant volatility as major U.S. stock indices plummeted, influenced by renewed trade tensions, while France grappled with political instability and Egypt received a credit rating upgrade.
U.S. Markets See Sharp Sell-Off Amid Tariff Threats
U.S. equity markets closed sharply lower on Friday, reversing earlier gains, after President Donald Trump reportedly threatened "massive" tariffs on China. The tech-heavy NASDAQ unofficially closed down 814.24 points, or 3.54%, at 22,210.39. The S&P 500 also saw a substantial decline, losing 183.54 points, or 2.73%, to finish at 6,551.57. Meanwhile, the Dow Jones Industrial Average fell by 866.85 points, or 1.87%, closing at 45,491.57. This broad market downturn was largely attributed to concerns over a potential escalation in the U.S.-China trade dispute, with tech and semiconductor stocks leading the sell-off.
France Reappoints Prime Minister Amidst Fiscal and Political Turmoil
In France, President Emmanuel Macron has re-appointed Sebastien Lecornu as Prime Minister, just four days after Lecornu had resigned from the post. Lecornu's immediate and critical mission is to form a new government and deliver a budget to parliament by the end of the year. He emphasized the urgent necessity of restoring France's public finances and bringing an end to the ongoing political crisis. France is currently facing a significant fiscal challenge, with its 2024 deficit reaching 5.8% of GDP and national debt at 114% of GDP, making it one of the most indebted nations in the eurozone. His previous tenure, lasting only 26 days, was the shortest in the history of the French Fifth Republic.
Egypt's Credit Outlook Improves with S&P Upgrade
In a positive development for the North African nation, S&P Global Ratings upgraded Egypt's long-term sovereign credit rating to 'B' from 'B-', maintaining a stable outlook. This upgrade reflects the benefits derived from Egypt's shift to a flexible exchange rate policy and ongoing macroeconomic reforms. S&P noted improvements in the country's economic growth prospects, increased tourism revenue, and greater remittance inflows, which have strengthened its external economic position. The Egyptian government achieved a primary surplus of 3.5% of GDP for fiscal year 2025.
U.S. Bank Deposits Show Growth
Amidst these global developments, U.S. bank deposits demonstrated an increase, rising to $18.522 trillion for the week, up from $18.421 trillion in the prior week. This growth indicates a continued accumulation of funds within the U.S. banking system.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.