S&P Futures Slip as Trump Doubles Down on Tariffs

September S&P 500 E-Mini futures (ESU25) are trending down -0.62% this morning as sentiment took a hit after U.S. President Donald Trump ratcheted up trade tensions yet again.

Late Thursday, President Trump announced a 35% tariff on Canadian imports, set to take effect on August 1st. However, the White House said goods complying with the U.S.-Mexico-Canada Agreement would continue to be exempt. Also, Mr. Trump said the European Union could receive a letter on tariff rates by Friday, casting doubt on the progress of trade negotiations between Washington and the bloc. In addition, Trump said he plans to raise blanket levies to 15%-20% on most trading partners that have not yet been given proposed tariff rates. “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%,” he told NBC News.

The International Monetary Fund said Thursday it is keeping a close watch on the latest U.S. tariff announcements, cautioning that global economic uncertainty remains high. It called on countries to engage constructively to maintain a stable trade environment.

In yesterday’s trading session, Wall Street’s major indices closed higher, with the S&P 500 notching a new all-time high. Delta Air Lines (DAL) surged about +12% and was among the top percentage gainers on the S&P 500 after the carrier posted better-than-expected Q2 results and reinstated its 2025 profit guidance. Also, Advanced Micro Devices (AMD) rose more than +4% after HSBC upgraded the stock to Buy from Hold with a $200 price target. In addition, MP Materials (MP) jumped over +50% after announcing a public-private partnership with the U.S. Department of Defense aimed at speeding up the build-out of the nation’s rare earth magnet supply chain. On the bearish side, Helen of Troy (HELE) plummeted more than -22% after the company behind brands including Hydro Flask and Braun Thermometers posted downbeat FQ1 results.

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell -5K to an 8-week low of 227K, compared with the 236K expected.

St. Louis Fed President Alberto Musalem said on Thursday that while he sees upside risks to inflation, it is still too early to determine whether tariffs will have a persistent impact on prices. “It’s going to take time for the tariffs to settle. There’s a scenario where we could be in Q4 this year, or Q1 or Q2 of next year, where tariffs are still working themselves into the economy,” he said. At the same time, San Francisco Fed President Mary Daly said she continues to see two interest rate cuts as likely this year and believes there is a higher likelihood that the inflationary impact of tariffs may be more subdued than expected.

“There’s zero chance we’ll have tariff clarity by Aug. 1, which makes a July rate cut impossible,” said Tom Essaye of The Sevens Report. “The practical impact of this consistently delayed tariff policy is to reduce the chances of a September rate cut, which could leave rates higher for longer and increase the chances of an economic slowdown.”

Meanwhile, U.S. rate futures have priced in a 93.3% probability of no rate change and a 6.7% chance of a 25 basis point rate cut at the next central bank meeting in July.

The U.S. economic data slate is empty on Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.389%, up +0.73%.

The Euro Stoxx 50 Index is down -1.10% this morning as investors braced for U.S. President Donald Trump to announce the EU’s tariff rate and assessed the latest round of trade escalations out of Washington. Trump on Thursday said the European Union could receive a letter on tariff rates by Friday, casting doubt on the progress of trade negotiations between Washington and the bloc. Bank and healthcare stocks underperformed on Friday. Still, the benchmark index is on track to log a weekly gain. Data from the Office for National Statistics released on Friday showed that the U.K. economy shrank for a second straight month in May, marking a sharp turnaround from the stronger-than-expected start to the year and increasing the likelihood of an imminent interest rate cut by the Bank of England. Separately, data showed that France’s annual inflation rate rose to 1.0% in June, slightly above analysts’ expectations and the preliminary reading. Meanwhile, European Central Bank Executive Board member Isabel Schnabel said Friday that the central bank should hold off on further interest rate cuts after inflation in the region reached the 2% target in June. At the same time, ECB Governing Council member Fabio Panetta said that the central bank should maintain its monetary easing stance if risks to economic growth from trade tensions and geopolitical instability strengthen the current disinflationary pressures. In corporate news, DNB Bank ASA (DNB.O.DX) plunged over -7% after Norway’s largest lender posted weaker-than-expected quarterly earnings.

U.K. GDP and France’s CPI data were released today.

U.K. May GDP has been reported at -0.1% m/m and +0.7% y/y, compared to expectations of +0.1% m/m and +0.7% y/y.

The French June CPI arrived at +0.4% m/m and +1.0% y/y, stronger than expectations of +0.3% m/m and +0.9% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.01%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.19%.

China’s Shanghai Composite Index closed just above the flatline today as investors adopted a cautious stance ahead of next week’s string of key economic data from the country. Rare earth stocks led the gains on Friday. Brokerage stocks also climbed on rising optimism that more firms may be granted crypto-trading licenses. At the same time, bank stocks slumped after rising to a record high on Thursday. Also, property stocks retreated, giving back some of Thursday’s sharp gains. The prior day’s rally was driven by unverified social media reports of a potential high-level meeting similar to the 2015 Central Urban Work Conference, which aimed to advance urban planning and infrastructure. Still, Goldman Sachs said expectations are low for new shantytown redevelopment efforts, but noted there are trading opportunities in the sector as fresh policy announcements may emerge ahead of upcoming policy meetings. Meanwhile, the benchmark index notched its third consecutive weekly gain. In other news, U.S. Secretary of State Marco Rubio on Friday held talks with his Chinese counterpart Wang Yi on the sidelines of a regional meeting in Malaysia, their first in-person meeting amid ongoing trade tensions between the two major powers. In corporate news, Wuxi AppTec surged over +10% in Hong Kong after stating that its first-half profit is likely to have more than doubled compared to the same period last year. Investor focus now shifts to China’s trade data, second-quarter gross domestic product, and other activity indicators due next week for a clearer view of the economy’s health. Investors also look forward to the Politburo meeting that usually takes place at the end of July for more policy signals.

Japan’s Nikkei 225 Stock Index gave up earlier gains and closed lower today, weighed down by a sell-off in Uniqlo-brand owner Fast Retailing. The benchmark index also notched a weekly loss. Fast Retailing tumbled over -6% after the company warned that higher U.S. tariffs would begin significantly affecting its U.S. operations later this year and that it plans to raise prices to cushion the impact. The warning came just days after U.S. President Donald Trump announced a 25% tariff on Japanese goods, set to take effect on August 1st. In response, Japanese Prime Minister Shigeru Ishiba said that he would continue negotiations with the U.S. to seek a mutually beneficial trade deal, while also stressing the importance of reducing Japan’s reliance on the U.S. in key areas like defense, food, and energy. Meanwhile, Japan is reportedly aiming to arrange talks between tariff negotiator Ryosei Akazawa and U.S. Treasury Secretary Scott Bessent during the latter’s visit to Japan for the World Expo next week. In other news, Japan’s farm ministry said on Friday that an animal health and quarantine pact between Japan and China had taken effect, opening the door for the resumption of Japanese beef exports to China that had been suspended since 2001. In other corporate news, Seven & I Holdings gained more than +3% after the convenience store operator reported better-than-expected quarterly operating profit. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +0.84% to 22.88.

Pre-Market U.S. Stock Movers

Chip stocks are falling in pre-market trading, with ON Semiconductor (ON), GlobalFoundries (GFS), and Arm Holdings (ARM) down about -1%.

Albemarle (ALB) slid more than -3% in pre-market trading after UBS downgraded the stock to Sell from Neutral with a price target of $57.

Cryptocurrency-exposed stocks are moving higher in pre-market trading after the price of Bitcoin surged to an all-time high overnight. MicroStrategy (MSTR) is up more than +3%. Also, MARA Holdings (MARA) is up over +4%, and Coinbase (COIN) is up more than +2%.

Levi Strauss (LEVI) climbed over +8% in pre-market trading after the jeans maker posted upbeat Q2 results and raised its full-year guidance.

AMC Entertainment (AMC) surged more than +7% in pre-market trading after Wedbush upgraded the stock to Outperform from Neutral with a price target of $4.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - July 11th

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