New York, N.Y. — U.S. stock futures took a sharp downturn Friday following President Donald Trump’s announcement to begin sending letters outlining new tariffs for various countries. The impending tariffs, expected to take effect on August 1, are a continuation of his administration’s evolving trade policy.
In a press briefing Thursday, Trump revealed that he would dispatch approximately “10 or 12” letters on Friday, with more to follow in the coming days. He indicated that the proposed tariffs could range significantly, possibly between 10% to 70%. This announcement came while U.S. markets were closed for the Independence Day holiday, which likely contributed to the immediate market reaction.
Futures tied to the Dow Jones Industrial Average declined by 251 points, equating to a 0.56% drop. The S&P 500 and Nasdaq futures also faced losses, falling 0.64% and 0.68%, respectively. Additionally, oil prices decreased, with U.S. crude slipping 0.75% to $66.50 per barrel and Brent crude down 0.41%, now at $68.52. Meanwhile, gold prices saw a slight rise of 0.11% to $3,346.70 per ounce. The U.S. dollar also weakened, dropping 0.16% against the euro and 0.30% against the yen.
The Trump administration had recently paused tariffs on key trading partners, a grace period set to expire on July 9. As that deadline approaches, speculation is rife about whether the president will extend the pause or implement new tariffs, igniting concern among investors. Analysts from Capital Economics suggested that while markets may anticipate a conciliatory approach, any failure to deliver on expectations could lead to volatility.
Historically, Trump has expressed a preference for imposing unilateral tariffs rather than engaging in multilateral negotiations. He has stated that he would rather issue direct letters to nations, outlining specific tariffs rather than extending the current reprieve. In a recent interview, he maintained that the letters serve as a fair communication regarding trade in the U.S., even implying that the current trade discussions could be concluding with these announcements.
Strategists cited the pronounced risk of renewed market turbulence, especially if the anticipated outcome turns adverse. Trump’s previous tariffs had already triggered significant sell-offs, further adding to market unease. With analysts urging caution, the looming July 9 deadline remains a critical juncture for global trading dynamics.
Trump’s framing of the situation suggests an acknowledgment that talks with some countries may take longer, potentially leading to targeted punitive measures for those deemed non-compliant. Whether these letters will in fact materialize as a catalyst for trade disputes or serve to stabilize existing negotiations remains uncertain. As markets react to the shifting landscape, investor sentiments point to a need for vigilance as developments unfold in the coming days.