Market Snapshot at the Closing Bell
U.S. stocks retreated Friday, pulling back from record highs as investors digested President Trump’s latest tariff announcements. The S&P 500 fell 0.4% at the market close, a day after notching a new record high. The Dow Jones Industrial Average shed 267 points, or 0.6%, while the tech-heavy Nasdaq Composite dipped 0.2%.
The market’s decline came after President Trump announced a 35% tariff on Canada and threatened higher tariffs across the board. In comments to NBC News, Trump indicated plans for blanket tariffs of 15% to 20% on most trading partners, higher than the current 10% standard that investors had grown comfortable with.
Tariff Tensions Escalate
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump told NBC News, brushing off inflation concerns. “I think the tariffs have been very well-received. The stock market hit a new high today.”
The President cited fentanyl as a reason for higher Canada duties, adding that they would go higher if the country retaliates. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump said in a letter posted on Truth Social.
Traders were also awaiting a trade update from Trump on the European Union this week, though it remains unclear whether the president will post a letter with a new rate like he did with Canada or simply give an update on progress of ongoing deal talks.
Banking Sector Faces Pressure
The financial sector showed weakness ahead of next week’s earnings reports. JPMorgan led banks lower Friday, down about 1%. Citigroup lost about 1% as well, and Wells Fargo dipped 0.6%.
Wall Street analysts predict that companies in the S&P 500 will deliver 5% growth in second-quarter earnings, according to FactSet. That would mark the lowest rate since the fourth quarter of 2023.
Nvidia Reaches Historic Milestone
Despite the broader market pullback, Nvidia (NVDA) continued to show strength after becoming the first company in history to reach a $4 trillion market valuation earlier this week. The chip designer briefly hit the milestone on Wednesday when its shares rose to an all-time high of $164.42.
Nvidia’s soaring market value underscores Wall Street’s confidence in the rapid growth of AI, with the company’s high-performance chips forming the backbone of this technological advance. “It highlights the fact that companies are shifting their asset spend in the direction of AI and it’s pretty much the future of technology,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.
The stock has rebounded about 74% from its lows in April, when global markets were jolted from President Trump’s initial tariff announcements. Nvidia now accounts for 7.3% of the S&P 500, exceeding Apple and Microsoft’s weightings.
Other Notable Market Movers
Levi Strauss (LEVI) jumped 8.2% after the jeans maker easily beat Wall Street’s sales and profit targets and raised its full-year forecast, despite expecting higher costs from tariffs.
TE Connectivity (TEL) gained nearly 2% in early trading after Citi analyst Asiya Merchant upgraded the stock to buy from neutral and increased her price target to $200 from $150. Merchant cited “stabilization trends in automotive market production” that could propel shares higher in the coming months.
T-Mobile (TMUS) shares were largely unchanged after the Justice Department announced Thursday that it would not prevent the company from closing on its proposed $4.4 billion acquisition of U.S. Cellular. U.S. Cellular shares were up 2.7%.
In the cryptocurrency space, Bitcoin climbed to another all-time high Friday, briefly eclipsing $118,000 before easing back to $117,600. The price jump came amid bullish momentum across risk assets and coincides with Nvidia’s surge to its $4 trillion valuation.
Earnings Reports After the Close
Several companies are scheduled to report earnings after today’s market close. WD-40 Company (WDFC) will release its fiscal third-quarter results, with analysts expecting earnings per share of $1.40.
PriceSmart (PSMT) will also report its fiscal third-quarter earnings, with analysts projecting EPS of $1.09.
Looking Ahead: Bank Earnings and Economic Data
Markets will be closely watching next week as earnings season shifts into high gear. JPMorgan Chase, Wells Fargo, and Citigroup are among the big banks due to report their results on Tuesday.
Drew Pettit, Citi’s U.S. equity strategy director, warned that the economy needs to continue to stay resilient for the current rally to be sustainable.
The administration had initially set Wednesday as a deadline for countries to make deals with the U.S. or face heavy increases in tariffs. But with just two trade deals announced since April—one with the United Kingdom and one with Vietnam—the window for negotiations has now been extended to August 1.
As markets today closed lower, investors appear to be taking a more cautious approach after weeks of steady gains that pushed major indexes to record levels. Whether this represents a temporary pause or the beginning of a more significant pullback will likely depend on upcoming earnings reports and further developments in U.S. trade policy.
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.