Stocks Slump as President Trump Threatens Tariffs on EU and Apple

The S&P 500 Index ($SPX) (SPY) today is down -1.05%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.85%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.32%.  June E-mini S&P futures (ESM25) are down -1.08%, and June E-mini Nasdaq futures (NQM25) are down -1.31%. 

Stock indexes today are sharply lower, with the S&P 500 and Dow Jones Industrials falling to 2-week lows and the Nasdaq 100 dropping to a 1-1/2 week low.   Stocks are being undercut by trade tensions and concerns about the fiscal outlook.  Comments today from President Trump knocked Apple’s shares down more than -2% and weighed on technology stocks when he threatened 25% tariffs on Apple if the company’s iPhones were not made in the US.  Losses in stock index futures accelerated today when President Trump threatened a 50% tariff on goods from the European Union starting on June 1, saying, “Our discussions with them on trade are going nowhere.”

Stocks and the dollar have been under pressure this week due to the reduced attractiveness of US assets to foreign investors with the ongoing trade war, last Friday’s Moody downgrade of the US credit rating, and the negative US budget deficit outlook in the Republican reconciliation bill.  Lower bond yields today are limiting losses in stocks, as the 10-year T-note yield is down -4 bp to 4.49%.

The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

Q1 earnings reporting season is winding down.  So far, almost 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest since Q2 of 2024.  Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season.  Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.  

Overseas stock markets today are mixed.  The Euro Stoxx 50 tumbled to a 2-week low and is down sharply by -2.96%.  China’s Shanghai Composite fell to a 1-1/2 week low and closed down -0.94%.  Japan’s Nikkei Stock 225 closed up +0.47%.

Interest Rates

June 10-year T-notes (ZNM25) today are up +16 ticks.  The 10-year T-note yield is down -4.0 bp to 4.489%.  June T-notes are climbing today on an increase in safe-haven demand as stocks falter.  T-notes also have carryover support from Thursday when Fed Governor Waller said the Fed could cut rates in the second half of this year if tariffs settle around 10%. Gains in T-notes are limited by concern the unfunded tax cuts in President Trump’s budget would force the Treasury to increase the sales of Treasury debt securities to finance the burgeoning deficit. 

European government bond yields today are moving lower.  The 10-year German bund yield fell to a 2-week low of 2.539% and is down -8.0 bp at 2.563%.  The 10-year UK gilt yield is down -3.4 bp to 4.717%.

The ECB reported that Q1 negotiated wages in the Eurozone rose +2.4%, down from +4.1% in Q4, a sign of easing wage pressures and a dovish factor for ECB policy.

German Q1 GDP was revised upward to +0.4% q/q and -0.2% y/y from the previously reported +0.2% q/q and -0.4% y/y.

UK Apr retail sales ex-auto fuel rose +1.3% m/m, stronger than expectations of +0.1% m/m.

ECB Governing Council member Rehn said, “If the incoming data and macroeconomic analysis confirm the current outlook for stabilization of inflation and somewhat subdued growth, the appropriate response in June would be to continue monetary easing and cut interest rates.”

ECB Governing Council member Stournaras said, “I believe the ECB will cut interest rates one more time in June and then I see a pause.”

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at the June 5 policy meeting.

US Stock Movers

Chip stocks are retreating today and are weighing on the overall market.  Qualcomm (QCOM), Microchip Technology (MCHP), and ON Semiconductor (ON) are down more than -3%.  Also, Applied Materials (AMAT), Micron Technology (MU), KLA Corp (KLAC), NXP Semiconductors NV (NXPI), Texas Instruments (TXN), Lam Research (LRCX), GlobalFoundries (GFS), and Intel (INTC) are down more than -2%.  In addition, Finally, Advanced Micro Devices (AMD), Analog Devices (ADI), and Marvel Technology (MRVL) are down more than -1%.

Apple (AAPL) is down more than -2% to lead losers in the Dow Jones Industrials after President Trump threatened 25% tariffs on the company if iPhones aren’t made in the US.

Deckers Outdoor (DECK) is down more than -21% to lead losers in the S&P 500 after forecasting Q1 net sales of $890 million to $910.0 million, weaker than the consensus of $923.5 million.

Booz Allen Hamilton Holding (BAH) is down more than -17% after forecasting 2026 adjusted Ebitda of $1.32 billion-$1.37 billion, well below the consensus of $1.42 billion.

Ross Stores (ROST) are down more than -9% after forecasting Q2 EPS of $1.40 to $1.55, weaker than the consensus of $1.66, and withdrawing its annual guidance “given the highly volatile environment.”

Copart (CPRT) is down more than -6% after reporting Q3 revenue of $1.21 billion, below the consensus of $1.22 billion.

Nuclear power stocks are climbing today after Reuters reported that President Trump will sign executive orders to ease the regulatory process on approvals for new reactors.  Centrus Energy (LEU) is up more than +13%, NuScale Power (SMR) is up more than +11%, and Constellation Energy (CEG) and Vistra (VST) are up more than +1%. 

Gold mining stocks are stronger today with the price of gold up more than +1% at a 2-week high.  Gold Fields Ltd (GFI) is up more than +3%, Anglogold Ashanti Plc (AU) is up more than +2%, and Newmont (NEM) is up more than +1%.

Intuit (INTU) is up more than +9% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q3 net revenue of $7.75 billion, above the consensus of $7.56 billion and raised its full-year revenue forecast to $18.72 billion-$18.76 billion from a previous forecast of $18.16 billion-$18.35 billion, stronger than the consensus of $18.35 billion.

Seagate Technology Holdings Plc (STX) is up more than +2% after Morgan Stanley raised its price target on the stock to $140 from $99. 

Earnings Reports (5/23/2025)

American Vanguard Corp (AVD), Booz Allen Hamilton Holding Co (BAH), Buckle Inc/The (BKE), Gencor Industries Inc (GENC), NexPoint Diversified Real Estate Trust (NXDT), Starz Entertainment Corp (STRZ), TechTarget Inc (TTGT), Triumph Group Inc (TGI).