U.S. Stocks Giving Back Ground Amid Renewed Trade War Concerns

(RTTNews) - After moving mostly higher over the two previous sessions, stocks have moved back to the downside during trading on Friday. The Nasdaq and the S&P 500 are giving back ground after ending Thursday's trading at record closing highs.

Currently, the major averages are off their lows of the session but still in negative territory. The Dow is down 247.30 points or 0.6 percent at 44,403.34, the Nasdaq is down 42.13 points or 0.2 percent at 20,588.53 and the S&P 500 is down 20.07 points or 0.3 percent at 6,260.39.

The weakness 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 appears somewhat subdued, however, as a lack of major U.S. economic data may be keeping 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."

Sector News

Airline stocks have pulled back sharply after soaring in the previous session, dragging the NYSE Arca Airline Index down by 2.4 percent. The index ended Thursday's trading at a four-month closing high.

Considerable weakness is also visible among pharmaceutical stocks, as reflected by the 1.9 percent loss being posted by the NYSE Arca Pharmaceutical Index.

Healthcare, biotechnology and housing stocks are also seeing notable weakness, while gold stocks have shown a strong move to the upside along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index dipped by 0.2 percent, while Hong Kong's Hang Seng Index increased by 0.5 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.9 percent, the German DAX Index is down by 0.8 percent and the U.K.'s FTSE 100 Index is down by 0.4 percent.

In the bond market, treasuries have come under pressure after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.7 basis points 4.403 percent.