Stocks tumble after Trump re-escalates trade war with more tariff talk

US stocks fell ahead of the Memorial Day holiday, with investors reacting to the latest trade war rhetoric from President Donald Trump.

Here’s where major indexes stood at 12 p.m. in New York on Friday:

Trump said in a Truth Social post on Friday that Apple would be subject to a 25% tariff if it did not make iPhones in the US, and “not in India, or anyplace else.”

Apple shares dropped, down as much as 4% to $193.46.

Meanwhile, the president said in a separate post that he would recommend a 50% tariff on the European Union starting on June 1.

“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Trump wrote.

Going beyond stocks, the US dollar index dropped as much as 0.8% on Friday.

The fresh tariff threats have re-escalated the trade war right as investors were feeling as though the worst of the chaos may be over. Softer rhetoric and the US and China’s deal to lower tariffs for 90 days have helped the S&P 500 rally almost 11% in a month, though this week’s panic over the budget deficit has added a new layer of worry to the market.

Bond yields were lower on Friday, sparked by investors’ fleeing to safety as stocks were rattled by tariff fears.

“I think as we get closer to the end of this 90-day window for these trade negotiations, the market is really going to start focusing on tariffs more and more,” Paul Hickey, co-founder of Bespoke Investment Group, told Business Insider. Trump’s tariff pause is due to end on July 9.

Markets were also assessing new comments from a top Federal Reserve official on the outlook for interest rates.

“If we can get the tariffs down close to the 10% and then that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year, and then we’re in a good position to kind of move with rate cuts through the second half of the year,” Fed Governor Christopher Waller said in an interview on Fox Business.

Hickey said that Waller is known to be more dovish, so his comments aren’t wholly surprising. He added that bond investors may also be encouraged on Friday by a Supreme Court ruling that insulated Fed Chair Jerome Powell, even as the high court said Trump could fire other agency heads.