Trump threatened the tariffs before the U.S. stock market opened, saying on his Truth Social platform that trade talks with the European Union “were going nowhere” and that “straight 50%” tariffs could go into effect on June 1. The European Union is one of the United States’ largest trading partners.
Stocks fell immediately afterward in Europe, with France’s CAC 40 index losing 1.7%. The U.S. market also took a quick turn lower, and futures for U.S. stock indexes tumbled after earlier suggesting only modest moves at the open of trading.
The S&P 500 lost as much as 1.3% shortly after trading began, but it pared its loss as traders weighed whether Trump’s latest threats were just negotiating tactics aimed in hopes of getting a deal or something more.
Apple dropped 3% and was the heaviest weight on the S&P 500 after Trump went after the company specifically. He said he's been pushing Apple CEO Tim Cook to move production of iPhones to the United States, and he warned a tariff "of at least 25% must be paid by Apple to the U.S." if it doesn't.
Trump later clarified his post to say that all smart phones made abroad would be taxed and the tariffs could be coming as soon as the end of June.
“It would be also Samsung and anybody that makes that product,” Trump said. “Otherwise, it wouldn’t be fair.”
Trump has been criticizing companies individually when he's frustrated with how they're acting because of his tariffs and because of the uncertainty his trade war has created. He earlier told Walmart it should "eat the tariffs," along with China, after the retailer said it would likely have to raise prices to cover the increased cost of imports.
Deckers Outdoor, the company behind the Hoka and Uggs brands, became one of the latest companies to say all the uncertainty around the economy means it won't offer financial forecasts for the full upcoming year. Instead, it gave forecasts only for the upcoming quarter, and they fell short of analysts' expectations for revenue and profit.
That sent its stock down 19.9%, even though the company reported a stronger profit and revenue for the latest quarter than expected.
Ross Stores fell 9.8% after it pulled its financial forecasts for the full year, citing how more than half the goods it sells originate in China. “As such, we expect pressure on our profitability if tariffs remain at elevated levels,” CEO Jim Conroy said.
The off-price retailer gave a forecast for profit in the current quarter that included a hit taken from tariffs, and it fell short of analysts’ expectations. That dragged its stock down even though the company also reported a better profit for the latest quarter than expected.
On the winning side of Wall Street was Intuit, which rose 8.1% after the company behind TurboTax and Credit Karma reported a stronger profit for the latest quarter than analysts expected. Perhaps more importantly, Intuit also raised its forecasts for revenue and profit over its full fiscal year.
Stocks in the nuclear industry also rallied after Trump signed executive orders to speed up nuclear licensing decisions, among other measures meant to charge up the industry. Oklo, which is developing fast fission power plants, jumped 23%.
All told, the S&P 500 fell 39.19 points to 5,802.82. The Dow Jones Industrial Average dropped 256.02 to 41,603.07, and the Nasdaq composite sank 188.53 to 18,737.21.
Trump's latest tariff threats stirred up Wall Street after it had recovered most of the losses it had earlier taken because of the trade war. The S&P 500 dropped roughly 20% below its record at one point last month, when worries were at their height about whether Trump's stiff tariffs would cause a global recession. The index then climbed back within 3% of its all-time high after Trump paused his tariffs on many countries, most notably China.
In the bond market, Treasury yields fell after swinging back and forth a few times. The yield on the 10-year Treasury eased to 4.51% from 4.54% late Thursday.
It had been running higher earlier in the week, in part on worries about how Washington's efforts to cut taxes could add trillions of dollars to the U.S. government's debt.
In stock markets abroad, indexes were mixed in Asia, where markets closed before Trump issued his latest tariff threats. Tokyo’s Nikkei 225 rose 0.5%, while stocks fell 0.9% in Shanghai.
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AP Writers Matt Ott and Jiang Junzhe contributed.