Stock market today: Futures fall after Trump’s 35% tariff threat
U.S. stock futures dipped early Friday morning after President Donald Trump announced a sweeping 35% tariff on Canadian goods not covered by the U.S.-Mexico-Canada Agreement, effective August 1. While markets hit record highs just yesterday, investor sentiment cooled overnight as geopolitical tensions and tariff threats resurfaced.
Stock futures drop across major indexes
As of 6:05 a.m. ET, futures showed a broad retreat:
- Dow Jones Industrial Average Futures: -0.69%
- S&P 500 Futures: -0.67%
- Nasdaq Futures: -0.63%
Despite this morning’s pullback, the S&P 500 closed at a record 6,280 on Thursday, up 0.27%. Analysts believe today’s dip may represent profit-taking rather than panic, as the market prepares for Q2 earnings season.
Tariffs stoke uncertainty but not panic
Trump’s latest tariff announcement follows a series of protectionist moves, including a 50% tariff on copper imports and increased levies on Brazilian goods. However, market watchers say investors are growing accustomed to the political rhetoric.
“So the bark is probably stronger than the bite here,” Deutsche Bank analysts noted, pointing to the fact that trade agreement exemptions may mute the real impact.
At Fortune, executive editor Jim Edwards observed, “In Trumpworld, tomorrow never comes,” referring to how investors have begun discounting the likelihood that many tariff threats will be fully implemented.
Global markets react modestly
Global indexes also showed mixed movement:
- Stoxx Europe 600: -1.00%
- UK FTSE 100: -0.38%
- India Nifty 50: -0.79%
- South Korea Kospi: -0.19%
- China Markets: Mostly positive
Volatility ticked upward, with the VIX fear index rising 6% Thursday. But the broader market response suggests that investors aren’t yet spooked — in part due to resilient corporate performance.
Corporate earnings lift sentiment
Some companies are helping offset market jitters:
- Delta Air Lines reinstated its annual earnings guidance after pulling it in April. Though revised downward from January, the outlook still beat Wall Street’s expectations.
- Levi Strauss beat Q2 estimates and raised its full-year outlook, citing efforts to absorb tariff costs rather than pass them to consumers.
- PriceSmart also topped earnings forecasts, showing strong demand despite external pressures.
“Going into second-quarter earnings season, stocks could get an added boost from low expectations,” said Kristy Akullian at BlackRock. Analysts are forecasting just 3% YoY S&P 500 growth, compared to 13% in Q1 — a potentially low bar.
Analysts: Markets may be underpricing risks
While today’s retreat is modest, some warn that the market may be overly optimistic. Trump’s tariff threats — including a possible 200% tariff on pharmaceuticals — could have wide-reaching impacts. Pantheon Macroeconomics estimated such a move could wipe out 4% of Switzerland’s GDP, given the country’s drug exports.
Yet investor complacency remains.
“Markets are strong on the assumption Trump will retreat; markets being strong reduces the incentive for Trump to retreat,” noted UBS economist Paul Donovan.
For now, most firms believe the impact of tariffs will be delayed and absorbed by margins, not consumers — but that could shift quickly.