- U.S. stock indices pulled back today following Donald Trump's announcement of a proposed 50% tariff on the European Union, set to take effect as early as June 1. However, losses were partially recovered in the second half of the session. As of now, the S&P 500 is down 0.4%, the Dow Jones 0.3%, and the Nasdaq 100 has dropped 0.6%.
- The U.S. dollar is weakening, reflected in a 0.7% rise in the EURUSD pair, which has climbed above 1.136 today. Gold is up more than 2%, driven by heightened demand for safe-haven assets. Meanwhile, Bitcoin has slipped below $110,000, tracking the decline in Wall Street indices.
- Trump also issued a warning to Apple, threatening 25% tariffs if the company does not relocate its iPhone production to the United States. Apple shares are down over 2.5% in response to the President’s comments.
- European indices also dropped in reaction to Trump’s 50% tariff threat. However, the DAX recovered a significant portion of earlier losses and ended the week with a decline of nearly 1.6%. The European automotive and luxury goods sectors were particularly sensitive to the news.
- A brief risk-off move led to a decline in U.S. Treasury yields, with 10-year yields dipping below 4.5%. However, part of that move has since reversed, and yields are currently holding above that threshold.
- Volatility also picked up, with VIX futures gaining around 4%, though this comes after retracing half of their earlier spike.
- Canadian retail sales data showed stronger month-over-month growth for March (+0.8%) than expected (+0.7%). However, excluding auto sales—likely boosted by pre-tariff purchasing—core retail sales fell by -0.7% MoM.
- U.S. new home sales came in slightly above expectations, with 743,000 new homes sold in April, compared to the consensus of 693,000.
- In the agricultural commodities market, volatility remained limited except for cocoa, which saw a sell-off of more than 4%. Industrial metals posted modest gains, while platinum and silver followed gold’s lead and moved higher.
- U.S. Treasury Secretary Bessent stated that the United States aims to reduce bond yields and stimulate private investment. He added that positive effects from deregulation are expected to become visible in GDP data by 2026.
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