US stocks fall sharply as tariff uncertainty prevails; Trump accuses China of trade pact violation
Wall Street's main indexes were under pressure on Friday as U.S. President Donald Trump accused China of violating a tariff agreement, ramping up tensions in a bruising trade war and clouding the last day of an otherwise strong month for equities.
ADVERTISEMENT At 12:51 a.m. ET, the Dow Jones fell 246.07 points or 0.58% to 41,969.66, the S&P 500 declined 60.16 points or 1.02% to 5,852.01, and the Nasdaq dropped 309.18 points or 1.61% to 18,866.69.
Trump's post on his Truth Social platform said China had breached an agreement with the U.S. to mutually roll back tariffs and trade restrictions for critical minerals, and issued a new veiled threat to get tougher with Beijing.
His message, which did not specify how China had violated the agreement, dashed hopes for a broader and more permanent solution to the trade spat between the world's two largest economies."The predominant theme today is Trump's Truth Social post ... investors are pleased with the PCE data but it's not really the driving force or factor behind today's trade," said Robert Pavlik, senior portfolio manager at Dakota Wealth.Data showed U.S. consumer spending increased marginally in April, with the year-on-year reading increasing to 2.1% after advancing 2.3% in March. The Fed tracks the PCE price measures for its 2% inflation target.
ADVERTISEMENT Traders maintained their bets that the U.S. central bank would cut its target for short-term borrowing costs in September.Despite the losses, both the Nasdaq and the S&P 500 are on track for their biggest monthly gain since November 2023. The Dow is also set for monthly gains for the first time since January.
ADVERTISEMENT It has been a volatile month for stocks as Trump's on-and-off trade moves kept investors on edge, but his softening tariff stance, along with upbeat earnings and tame inflation data, had helped the S&P 500 rebound from its April lows. It is now about 4% lower than a record high hit in February.Most megacap and growth stocks fell, with Nvidia down 2.5% following its results-driven rally on Thursday.
ADVERTISEMENT Seven of the 11 major S&P 500 sub-sectors fell, with energy and information technology declining the most.In the previous session, U.S. equities initially rallied after the Court of International Trade ruled late on Wednesday to effectively block most levies imposed since January, without addressing some industry-specific tariffs.
ADVERTISEMENT However, a federal appeals court on Thursday temporarily reinstated most of the tariffs and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9.Among other big movers on the day, Ulta Beauty jumped 11.5% after the cosmetics retailer raised its annual profit forecast after beating quarterly results.Shares of drugmaker Regeneron dropped almost 20% after its experimental drug for patients with a type of lung condition commonly called "smoker's lung" failed a late-stage trial, although it succeeded in another.Declining issues outnumbered advancers by a 1.36-to-1 ratio on the NYSE and by a 1.47-to-1 ratio on the Nasdaq.
The S&P 500 posted 11 new 52-week highs and two new lows while the Nasdaq Composite recorded 35 new highs and 60 new lows.
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