Trump Tariff Threat Shocks Wall Street — US Stock Futures Slide Fast

US stock futures edged lower early Friday, weighed down by renewed trade concerns after former President Donald Trump signaled a possible escalation in tariff measures. Futures tied to the S&P 500 dipped 0.6%, retracing slightly after the benchmark closed at a record high, bolstered by solid labor market data that reinforced the strength of the US economy.

The market’s momentum took a hit as Trump hinted at imposing unilateral tariffs of up to 70%, potentially starting as early as today. This unexpected stance rekindled worries over trade instability, shaking investor confidence and dragging equity markets lower across the globe.

In Europe, the Stoxx 600 dropped 0.7%, led by declines in mining and automotive shares, which are especially sensitive to trade developments. Asian markets also posted losses, while investors turned to traditional safe havens—gold gained 0.3%, and the dollar edged slightly lower. Trading volumes were thin as US markets remained closed for the Independence Day holiday.

Despite a rally in equities since April—fueled by strong earnings and resilient economic indicators—investors are increasingly cautious, wary of policy shocks and global economic headwinds. Market analysts noted a sense of hesitation creeping in, with some seeing the current pullback as a natural breather following a strong surge.

Meanwhile, strategist Michael Hartnett from Bank of America suggested that the S&P 500 may be nearing a point of overextension. He flagged the 6,300 level as a potential sell signal, advising investors to consider reducing exposure amid mounting concerns over market bubbles and speculative excesses—especially following the House’s recent approval of a $3.4 trillion fiscal package.

Bond markets offered mixed signals. European yields declined slightly, though UK gilts showed little change after a sharp selloff earlier in the week tied to domestic fiscal worries. The 10-year UK yield hovered around 4.53%, while the pound remained flat against major currencies.

Tensions also flared between China and the European Union. Beijing announced it would cancel portions of a planned summit with EU leaders, citing worsening trade relations. Additionally, China imposed five-year anti-dumping duties on European brandy, though some major cognac producers received exemptions after price commitments. Shares of Remy Cointreau and Pernod Ricard saw fluctuations but ultimately steadied.

In commodities, oil prices slid 0.7% ahead of an OPEC+ meeting expected to approve another significant supply boost. Analysts are concerned that increased output could contribute to a surplus later in the year.

Corporate Developments:

• Air France-KLM will move forward with plans to increase its stake in SAS AB to 60.5%, aiming to strengthen its footprint in European aviation.

• Jane Street Group LLC, a prominent US trading firm, has been temporarily restricted from India’s securities market following regulatory scrutiny linked to sizable profits.

• Alstom SA secured a €2 billion contract with New York’s Metropolitan Transportation Authority to supply new train cars as part of a fleet upgrade.

• Frasers Group Plc announced it would oppose any dividend proposals from Hugo Boss AG, as part of its strategic influence within the German fashion brand.

• An insurance firm backed by Apollo Global Management Inc. proposed a £5.7 billion acquisition of a UK-based specialist insurer partly owned by entities tied to South African billionaire Johann Rupert.

• Widespread flight cancellations continued across Europe amid a second day of strikes by French air traffic controllers, affecting travel during peak summer holiday season.

• Banco Sabadell SA has scheduled two shareholder meetings to vote on a special dividend following its divestment of a UK subsidiary—part of its strategy to resist a takeover by BBVA SA.

• Chinese developer Country Garden Holdings Co. reported another monthly drop in home sales, lagging behind peers as weak policy support continues to hamper demand.

Market Snapshot (as of 7:55 a.m. ET):

Equities:

• S&P 500 futures: -0.6%

• Nasdaq 100 futures: -0.6%

• Dow Jones futures: -0.5%

• Stoxx Europe 600: -0.7%

• MSCI World Index: Flat

Currencies:

• Dollar Index: -0.1%

• Euro: +0.1% at $1.1773

• British Pound: Unchanged at $1.3645

• Japanese Yen: +0.4% at 144.38 per dollar

Cryptocurrencies:

• Bitcoin: -1% at $108,924.78

• Ether: -1.9% at $2,550.59

Bonds:

• US 10-Year Treasury Yield: Unchanged at 4.35%

• Germany 10-Year Yield: -2 bps to 2.59%

• UK 10-Year Yield: Flat at 4.53%

Commodities:

• WTI Crude: -0.7% at $66.50/barrel

• Spot Gold: +0.3% at $3,336.44/oz

The drop in futures caps a volatile stretch for investors, who had pushed US stocks to new highs just days earlier. With tariff threats back in play, markets are likely to remain on edge as traders await any policy follow-through from Washington.

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