Dow, Nasdaq, S&P 500 Decline Amid Trump Tariff Threats, Deficit Worries

U.S. Stocks Close Week Lower as Trump’s Broad Tariff Threats and Deficit Fears Shake Markets

Markets Slide Amid Rising Trade War Tensions and Economic Uncertainty

U.S. stock markets fell sharply on Friday, ending the week with losses exceeding 2% across major indexes, as renewed trade war threats from former President Donald Trump collided with growing unease about the nation’s swelling fiscal deficit. Trump’s comments targeting Apple, Samsung, and European imports triggered fresh anxiety over global supply chains, while his expansive tax bill moving through Congress stoked fears of rising U.S. debt and higher borrowing costs.

By Friday’s close:

• Dow Jones Industrial Average (^DJI): 41,586.42, down 0.6% for the day, and over 2% for the week

• S&P 500 (^GSPC): 5,810.45, down 0.7% for the day, and over 2% for the week

• Nasdaq Composite (^IXIC): 18,737.21, down 1.0% for the day, and over 2% for the week

Trump’s renewed threats included a 25% tariff on Apple iPhones not built in the U.S., and a 50% tariff on all European Union imports starting June 1. Speaking to reporters Friday, Trump added that such tariffs would also apply to Samsung and other smartphone manufacturers, unless production is shifted to American soil. “They’re going to be building plants here,” he insisted. Apple (AAPL) shares fell 3.02% to close at $195.27, with broader tech shares facing renewed pressure.

Highlights:

• All three indexes fell over 2% for the week amid tariff and deficit worries.

• Apple shares dropped 3% after Trump’s 25% tariff threat on foreign-made iPhones.

• Trump signaled tariffs may also hit Samsung and other global phone makers.

• Nasdaq underperformed with a 1% decline Friday and growing tech sector pressure.

Supply Chain Anxiety Escalates as Trump Expands Tariff Target List

Trump’s latest remarks signaled a dramatic escalation of his protectionist trade agenda, directly threatening smartphone giants and reshaping supply chain expectations. Apple, which has recently increased its manufacturing presence in India, is now under pressure to relocate production to the U.S. if it wishes to avoid punitive import duties. Trump said such tariffs would also extend to Samsung and other manufacturers, unless they follow suit.

“I want it to be built in the United States,” Trump declared. “Otherwise, it wouldn’t be fair.”

The broadening of tariff threats introduces a new wave of uncertainty for multinational firms amid already strained global logistics. Earnings reports this quarter have increasingly flagged tariff-related headwinds, with many firms withholding full-year guidance. The fear of further trade fragmentation comes just as businesses were regaining confidence following earlier tariff pauses.

Highlights:

• Trump broadens tariff threats to include Samsung and other smartphone firms.

• Apple’s India strategy now at risk amid new “Made in America” push.

• Companies warn of renewed supply chain disruptions and hold off on guidance.

Fiscal Deficit Concerns Rattle Bond Market as Tax Bill Clears House Vote

Investor sentiment was further shaken by news that Trump’s new tax-and-spending legislation passed a critical House vote. The bill, projected to add trillions to the federal deficit, has already sent long-term Treasury yields surging. This week, Moody’s downgraded U.S. debt outlook, adding fresh momentum to bond market volatility.

The 30-year Treasury yield (^TYX) remained above 5%, levels not seen since before the global financial crisis. While yields eased slightly Friday, investors are increasingly uneasy about federal debt sustainability, especially if the Fed is forced to keep rates high in the face of inflation and fiscal stimulus.

Stocks and bonds alike reflected investor concern over the combined effects of policy uncertainty and fiscal expansion, undermining recent market optimism about potential Fed rate cuts later this year.

Highlights:

• 30-year Treasury yield hovers above 5% after House advances Trump tax bill.

• Moody’s downgrade adds to fears over long-term U.S. debt outlook.

• Investors eye inflation and interest rate risks from expansive fiscal policy.

Trump Backs U.S. Steel Deal With Nippon as Industrial Shares Rally

Amid the broader market decline, U.S. Steel (X) shares soared more than 20% late Friday after Trump announced his support for a partnership between U.S. Steel and Japan’s Nippon Steel. The deal marks a rare bright spot in an otherwise turbulent week, as the administration seeks to present a narrative of industrial resurgence despite escalating trade frictions.

Trump’s vocal endorsement of the deal underscores his ongoing effort to position manufacturing and domestic production at the heart of his economic platform, even as tariffs risk undermining cross-border investment confidence.

Highlights:

• U.S. Steel shares jump over 20% after Trump backs Nippon partnership.

• Industrial policy continues to play central role in Trump’s economic message.

• Deal seen as offsetting some broader trade war concerns in manufacturing sector.

Market Outlook Turns to Nvidia Amid AI and Trade Policy Crosscurrents

Looking ahead, Wall Street will focus on Nvidia (NVDA), which is scheduled to report earnings on Wednesday after market close. While Nvidia has benefited from the AI investment boom, it has also found itself caught in the crosshairs of the administration’s tech trade policy and broader scrutiny of AI capital expenditures.

Options markets are pricing in less volatility for Nvidia than previous quarters, reflecting both high investor expectations and a wait-and-see stance on how much policy developments will impact the company’s future outlook.

Next week’s trading will be shortened due to the Memorial Day holiday, with U.S. markets closed Monday.

Highlights:

• Nvidia earnings Wednesday seen as key litmus test for tech sentiment.

• Options traders expect lower-than-usual volatility for NVDA stock.

• Nvidia faces dual pressures from AI growth scrutiny and tariff exposure.