U.S. stock markets closed the week with significant losses on Friday after President Donald Trump proposed imposing steep new tariffs on imports from Europe. The announcement, which called for 50% duties on a wide range of European products, marked a fresh escalation in global trade tensions and triggered renewed volatility in financial markets, according to a Reuters report.
All three major Wall Street indexes — the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite — ended the week in negative territory, each posting declines of more than 2%. Technology stocks led the downturn, followed by companies in the communication services and consumer discretionary sectors. In contrast, shares of utilities, energy producers, and manufacturers of essential goods showed relative strength, finishing the week in the green.
The tech-heavy Nasdaq was particularly hard-hit, dragged down by major declines in heavyweight stocks. Apple shares dropped 3% to their lowest level in two weeks after Trump suggested that iPhones might be subject to 25% tariffs. The president’s comment emphasized that devices sold in the United States but not manufactured domestically could be targeted under the proposed policy.
Market analysts noted that investors had hoped the recent easing of U.S.-China trade tensions would signal a broader de-escalation of global tariff disputes. However, the threat of new U.S. tariffs on European imports has reignited concerns about a prolonged trade war, particularly as the European Union prepares to respond with its own countermeasures.
According to Bloomberg, several EU officials criticized the U.S. proposal, warning that any additional tariffs would damage cross-Atlantic trade relations and strain key economic sectors, including automotive and agriculture. European carmakers such as BMW and Volkswagen saw their U.S.-listed stocks fall between 2% and 3% in response to the news.
The uncertainty also hit currency and commodity markets. The euro weakened against the U.S. dollar, dipping to 1.081 amid investor concerns about the impact of tariffs on the European economy. Meanwhile, safe-haven demand pushed gold prices higher, with the metal closing above $3,090 per ounce on Friday, up nearly 1.5% from the previous day.
Bond markets reflected the broader shift toward caution. The yield on the 10-year U.S. Treasury note declined to 4.12%, as investors sought the safety of government debt. Shorter-duration yields also fell slightly, indicating rising market expectations of potential interest rate cuts later this year if trade-related headwinds intensify.
Meanwhile, energy markets showed mixed movements. Brent crude oil prices edged higher to $79.60 per barrel, supported by supply constraints from OPEC+ nations. However, West Texas Intermediate (WTI) remained flat near $75.30 amid ongoing concerns about global demand.
Looking ahead, market participants are bracing for further developments in U.S. trade policy. The White House has not announced a formal implementation date for the proposed tariffs, but sources suggest that consultations are underway with key industry stakeholders. President Trump is expected to hold meetings with trade advisors and economic officials early next week to finalize the tariff strategy.
In addition, the European Central Bank (ECB) and the U.S. Federal Reserve are scheduled to release monetary policy updates in the coming days. Investors are watching closely for any indication of central banks adjusting their guidance in response to shifting trade dynamics and inflationary risks.
Despite the recent sell-off, some analysts maintain a cautiously optimistic outlook, pointing to strong corporate earnings and resilient consumer spending in the United States. However, most agree that escalating trade tensions represent a major source of downside risk for global markets in the near term.
