Renewed Trade Concerns May Lead To Weakness On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open for the markets on Friday, with stocks likely to give back ground after moving mostly higher over the two previous sessions.

The downward momentum on Wall Street comes amid renewed concerns about President Donald Trump's escalating trade battles.

In a letter to Canadian Prime Minister Mark Carney posted on Truth Social, Trump announced a 35 percent tariff on Canadian imports effective August 1st.

Trump said the tariffs were partly due to Canada's failure to stop fentanyl from "pouring" into the U.S. and threatened to raise tariffs further if Canada retaliates.

"If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter," Trump said.

Trump also told NBC News' "Meet the Press" moderator Kristen Welker he plans to impose blanket tariffs of 15 or 20 percent on most U.S. trade partners,

The president also indicated he soon plans to send letters to member of the European Union notifying them of new tariff rates.

Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.

Traders are also looking ahead to the start of earnings season, with a number of big name companies due to report their quarterly results next week.

"The corporate reporting season begins in earnest next week with the big US banks. That will shift the focus to profits and outlook statements, giving valuable insight into how the business world is coping with a multitude of pressures," said Dan Coatsworth, investment analyst at AJ Bell.

He added, "Any corporate optimism is likely to prompt a tickertape parade on the markets as investors look for confirmation that tariff uncertainty hasn't caused widespread damage to earnings."

Stocks moved mostly higher during trading on Thursday, adding to the strong gains posted during Wednesday's session. With the upward move, the Nasdaq and the S&P 500 reached new record closing highs.

The major averages pulled back off their highs going into the end of the day but still closed in positive territory. The Dow climbed 192.34 points or 0.4 percent to 44,650.64, the Nasdaq inched up 19.33 points or 0.1 percent to 20,630.66 and the S&P 500 rose 17.20 points or 0.3 percent to 6,280.46.

The higher close on Wall Street came despite ongoing uncertainty about Trump's trade policies, as he continues to threaten higher tariffs on various sectors and countries.

In a Truth Social post Wednesday evening, Trump announced a 50 percent tariff on copper is due to go into effect on August 1st.

Trump also posted several more letters to world leaders on Truth Social revealing plans to increase tariffs.

Trump posted letters sent to the leaders of the Philippines, Brunei, Moldova, Algeria, Iraq, Libya and Sri Lanka after posting letters sent to the leaders of 14 other leaders earlier in the week.

"Trump is throwing out numbers left, right and centre, and investors have begun to dismiss anything that isn't set in stone," said Dan Coatsworth, investment analyst at AJ Bell.

"So many of Trump's decisions have either been rolled back, forgotten about, or kicked down the road," he added. "For investors, that means a shift in focus back to economic data and corporate news flow as key drivers for markets."

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly edged modestly lower in the week ended July 5th. The report said initial jobless claims dipped to 227,000, a decrease of 5,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to inch up to 235,000 from the 233,000 originally reported for the previous week.

Airline stocks showed a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 7.8 percent to its best closing level in four months.

Delta Air Lines (DAL) led the sector higher, spiking by 12.0 percent after reporting better than expected earnings for the June quarter and reinstating its full-year profit outlook.

Significant strength was also visible among steel stocks, as reflected by the 1.8 percent jump by the NYSE Arca Steel Index.

Biotechnology, energy and financial stocks also saw notable strength, while software and networking stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are climbing $0.71 to $67.28 a barrel after plunging $1.81 to $66.57 barrel on Thursday. Meanwhile, after inching up $4.70 to $3,325.70 an ounce in the previous session, gold futures are jumping $32.50 to $3,358.20 an ounce.

On the currency front, the U.S. dollar is trading at 146.88 yen versus the 146.26 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1694 compared to yesterday's $1.1701.

Asia

Asian shares ended mostly lower in cautious trading on Friday after U.S. President Donald Trump announced a 35 percent tariff on Canadian goods, effective August 1, and warned of a blanket tariff of 15-20 percent on most trading partners that have not received letters yet.

Trump also said he would make an announcement regarding Russia, raising the prospect of more sanctions on the major oil producer.

The dollar, gold and oil all rose in Asian trading, as Trump threatened to revive his trade war.

China's Shanghai Composite Index gave up early gains to end on a flat note at 3,510.18.

Hong Kong's Hang Seng Index rose 0.5 percent to 24,139.57, with EV and tech stocks surging on Beijing's stimulus pledge ahead of a highly anticipated Politburo meeting.

Japanese markets gave up early gains to end lower. The Nikkei 225 Index dipped 0.2 percent to 39,569.68, while the broader Topix Index settled 0.4 percent higher at 2,823.24.

Fast Retailing plunged 6.9 percent after the Uniqlo brand owner said it anticipates a significant impact from higher U.S. tariffs later this year.

Technology and financial stocks rose, with Advantest, Tokyo Electron and Mitsubishi UFJ Financial Group rising 1-2 percent. Air-conditioning maker Daikin Industries surged 5.4 percent.

Embattled automaker Nissan Motor advanced 1.6 percent after raising $4.5 billion through a junk-bond sale in U.S. dollars and euros.

Seoul stocks snapped a four-day winning streak, with defense and shipbuilding stocks coming under selling pressure.

The Kospi ended down 0.2 percent at 3,175.77 after climbing above the 3,200-point level during intraday trading for the first time in nearly four years.

Australian markets ended slightly lower even as rare earth stocks soared on MP Materials' multibillion-dollar deal with the U.S. government to boost production of rare earth magnets.

The benchmark S&P/ASX 200 Index slipped 0.1 percent to 8,580.10 amid Trump's new tariff threats. The broader All Ordinaries Index finished marginally lower at 8,820.30.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index fell 0.6 percent to 12,686.68 after a survey showed manufacturing activity in the country remained in contraction in June. Europe

European stocks have fallen on Friday after U.S. President Donald Trump announced a 35 percent tariff on Canadian imports, starting August 1, in a dramatic escalation of a trade war with the United States' closest ally over the country's alleged role in fentanyl flows.

He also talked about blanket tariffs of 15 percent to 20 percent on most of America's trading partners and announced plans to make a "major statement" on Russia, denting investors' appetite for riskier assets.

Investors also waited for word on tariffs for the European Union. The U.S. currently imposes 50 percent tariffs on EU steel and aluminum, 25 percent on cars and 10 percent on all EU imports.

While the U.K.'s FTSE 100 Index is down by 0.6 percent, the German DAX Index and the French CAC 40 Index are both down by 1.0 percent.

In corporate news, BP Plc shares have jumped after the oil and gas giant said it expects higher oil output and strong trading performance in the second quarter.

Carclo, a global leader in high-precision components, has tumbled after announcing a delay to the publication of its audited results.

Budget airline Norwegian Air Shuttle has soared after reporting strong second quarter results.

On the data front, the U.K. economy shrank unexpectedly in May on a sharp fall in industrial output, data from the Office for National Statistics revealed.

Gross domestic product fell 0.1 percent in May, following a 0.3 percent drop in April.

French consumer price inflation increased to 1.0 percent in June from 0.7 percent in May, according to final data from the statistical office INSEE. June's inflation was revised up from 0.9 percent.

Elsewhere, German wholesale prices grew 0.9 percent on a yearly basis in June, following April's 0.4 percent increase, Destatis reported. The increase in June was the fastest in three months.

U.S. Economic News

No major U.S. economic data is scheduled to be released today.