Wall Street Slumps Amid Trump Tariff Threats and Market Jitters

US stocks fell sharply following Trump's tariff warnings on the EU and Apple, reigniting trade fears; tech and chip stocks led the decline as investors await Nvidia's earnings.

The tech-heavy Nasdaq tumbled as much as 1.7% early in the session before ending the day down 188.53 points (1%) at 18,737.21. The S&P 500 also slid 39.19 points (0.7%) to 5,802.82 and the Dow fell 256.02 points (0.6%) at 41,603.07.

Wall Street saw an early decline after former President Trump threatened 50% tariffs on EU imports starting June 1st, citing stalled trade talks. In another post, he warned of a 25% tariff on Apple iPhones made outside the U.S., causing Apple shares to drop 3%. These statements reignited trade tensions that had recently eased due to deals with the U.K. and China. The renewed uncertainty rattled investors and stirred fears of a broader trade conflict.

Traders were also looking ahead to earnings news from Nvidia (NVDA), with the AI daring scheduled to release its fiscal first quarter results after the close of trading next Wednesday. The Commerce Department released a report showing new home sales in the U.S. in the month of April spiked compared to a significantly downwardly revised level in March. The report said new home sales soared by 10.9% to an annual rate of 743,000 in April after jumping by 2.6% to a downwardly revised rate of 670,000 in March.

Semiconductor stocks turned in some of the market's worst performances on the day, dragging the Philadelphia Semiconductor Index down by 1.5%. Networking stocks was notably weak , as reflected by the 1.0% loss posted by the NYSE Arca Networking Index. Retail, computer hardware and software stocks too moved downwards while gold stocks moved sharply higher along with the price of the precious metal.

Asia-Pacific stocks turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose 0.5% while China's Shanghai Composite Index slid by 0.9%. The major European markets have all moved to the downside on the day while the U.K.'s FTSE 100 Index dipped by 0.2%, the German DAX Index slumped by 1.5% and the French CAC 40 Index tumbled by 1.7%.

In the bond market, treasuries extended the rebound seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.4 bps to 4.50%.

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