Stock Futures Drop 500 Points After Trump Tariff Announcement

TLDR

Trump threatens 25% tariff on Apple iPhones not manufactured in the US, targeting production moved to India President also announces 50% tariff on European Union imports starting June 1 due to stalled trade negotiations Dow futures drop over 500 points, S&P 500 and Nasdaq futures fall 1.3% and 1.6% respectively Investors flee to safe havens with gold rising 1.7% and Treasury yields retreating from recent highs All major stock indices head for weekly losses as companies delay earnings guidance due to tariff uncertainty

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Stock markets opened Friday in sharp decline after President Donald Trump announced new tariff threats targeting Apple and the European Union. The Dow Jones Industrial Average futures dropped 527 points, representing a 1.3% decline in early trading.

Trump posted on Truth Social that Apple must pay a 25% tariff on iPhones sold in the United States but manufactured outside the country. The president specifically mentioned that he had previously informed Apple CEO Tim Cook about his expectation for domestic iPhone production.

🚨 BREAKING: Trump announces a 50% tariff on the European Union starting on 1st June

Here we go again!! pic.twitter.com/CQqJIzwB68

— Trader Edge (@Pro_Trader_Edge) May 23, 2025

“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or any place else,” Trump wrote. Apple has been shifting some production to India as part of its supply chain diversification strategy.

Apple shares fell 3% in premarket trading following the announcement. The company has key suppliers in China and has been expanding manufacturing operations in India to reduce dependence on Chinese production.

European Union Also Targeted

Trump announced a separate 50% tariff on European Union imports set to begin June 1. The president cited difficulties in ongoing trade negotiations between Washington and Brussels as justification for the levy.

The European Union tariff represents an escalation in trade tensions with America’s key allies. Trump described the trading bloc as “very difficult to deal with” in current negotiations.

S&P 500 futures dropped 1.3% while Nasdaq 100 contracts fell 1.6%. The tech-heavy index faced particular pressure given Apple’s weight in technology sector calculations.

E-Mini S&P 500 Jun 25 (ES=F)

Market Flight to Safety

Investors moved into traditional safe haven assets as trade uncertainty increased. Gold prices climbed 1.7% to $3,351 per ounce in early trading.

Treasury bond yields retreated from recent highs as investors sought safety in government debt. The 30-year Treasury yield fell to 4.98% after spiking to 5.15% in the previous session.

The 10-year Treasury yield declined to 4.46% as bond prices rose. The U.S. dollar weakened 0.5% against a basket of six major currencies.

Corporate Earnings Impact

Companies have begun delaying annual earnings guidance due to tariff uncertainty. Several firms cited the unpredictable nature of trade policy changes during recent earnings calls.

The tariff announcements add supply chain complications for businesses already navigating existing trade restrictions. Manufacturing companies face particular challenges in production planning under changing trade rules.

All three major stock indices were positioned for weekly losses before Friday’s decline. The Memorial Day trading break on Monday provides a pause before markets resume Tuesday.

Deficit Concerns Continue

Wall Street continues weighing the economic impact of Trump’s tax legislation, which recently cleared a key House vote. Concerns about potential trillion-dollar additions to the federal deficit have pressured longer-term government bond yields.

Moody’s recent credit rating concerns have intensified focus on fiscal policy implications. The 30-year Treasury yield remained above the 5% threshold that has drawn investor attention.

Nvidia earnings are scheduled for Wednesday after market close, with options traders expecting lower volatility compared to recent quarters. The chip company faces scrutiny over both trade policy impacts and artificial intelligence investment costs.

The latest tariff threats were announced Thursday evening after Trump attended a private dinner at Trump National Golf Club.

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