Stocks dipped Friday after President Donald Trump accused China of “totally violating” its trade agreement with the U.S., adding fresh uncertainty to already jittery markets.
The Dow fell by 130 points, or 0.3%, while the S&P 500 and Nasdaq each dropped around 0.35%.
Trump’s Claims Fuel Trade Tensions
“China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted online. “So much for being Mr. NICE GUY!”
Markets, already uneasy over trade, saw volatility increase after the Court of International Trade blocked most of Trump’s tariffs midweek. That initial rally faded as investors braced for further legal battles.
Tariff Turmoil and Legal Uncertainty
A federal appeals court on Thursday paused the lower court’s ruling, leaving the status of Trump’s tariffs in limbo.
“The stunning, head-spinning, mind-boggling trade fiasco will not be resolved quickly,” noted Greg Valiere, chief U.S. policy strategist at AGF Investments. He expects the case could reach the Supreme Court, though even that might not end the dispute.
Inflation Data and Consumer Spending
New economic data Friday showed the Federal Reserve’s preferred inflation measure cooled in April, but consumer spending dropped more than expected.
Market Resilience Despite Challenges
Despite the turmoil, the S&P 500 has climbed more than 6% this month, tracking toward its strongest May since 1990.
“Even though the stock market has staged a decisive rebound since the April lows, there is still plenty of uncertainty on tariffs, especially given the legal battle,” said Clark Bellin of Bellwether Wealth.
Dollar Edges Higher
The U.S. dollar gained slightly Friday, but the U.S. dollar index is on pace for its fifth monthly decline in a row.
Outlook: Volatility Ahead
“We expect bouts of market volatility ahead as investors continue to navigate a range of market, economic and geopolitical risks,” said Ulrike Hoffmann-Burchardi, CIO at UBS Global Wealth Management.
The benchmark S&P 500 is up roughly 0.5% year-to-date.
Keep up with U.S. tariffs’ effect on trade with us on Que Onda Magazine.