Wall Street markets end the week with moderate declines

Friday's session on Wall Street ended with moderate declines, and the main indices were also down for the entire week. Investors were concerned about President Donald Trump's announcements to impose 50 percent tariffs on the European Union.

Dow Jones Industrial closed down 0.61 percent and reached 41,603.07 points.

At the end of the day, the S&P 500 fell by 0.67 percent and amounted to 5,802.82 points.

The Nasdaq Composite fell 1.00 percent to 18,737.21 points.

The Russell 2000 mid-cap index is down 0.30 percent at 2,039.57 points.

The VIX index is up 10.31 percent to 22.37 points.

Friday's declines added to the market's weekly losses. The S&P 500, Dow and Nasdaq are all down more than 2% this week.

"We've had a tailwind of de-escalation for six weeks now — and the market had one of the best six-week periods in the last 75 years — and the re-escalation of trade war rhetoric threatens that. I don't think we're going to retest the lows or anything like that unless it really takes off, but from a market perspective, it's certainly a step in the wrong direction," Ross Mayfield, investment strategist at Baird, told CNBC.

Looking ahead, Rick Wedell, president and chief investment officer at RFG Advisory, warned that this “roller coaster” of de-escalation and re-escalation of tariff tensions will likely become a regular feature of Trump’s second term.

“It’s very important for investors to understand that this ongoing issue of trade is likely to be there, I think, throughout the duration of this administration. I don’t think they’ll ever turn a blind eye to trade. I think they see it as a hallmark of the administration’s legacy of fixing international trade agreements,” he said. “I just want to encourage investors to never be lulled into a false sense one way or the other.”

Investors were focused on new tariff threats from US President Donald Trump on Friday, who threatened to introduce 50% tariffs on goods from the European Union from June 1. Trump also threatened Apple (the stock is down about 2%) with tariffs of at least 25% if the company does not produce its iPhones in the US.

At the very end of the European stock exchange session, US Treasury Secretary S. Bessent tried to calm the situation down by not ruling out the possibility of signing several large trade agreements in the coming weeks, but this did not calm the markets.

Trump’s actions come at a time when trade tensions were easing. Trump imposed tariffs on much of the world in April, which rocked the stock market and nearly sent the S&P 500 into a bear market. The president then put the toughest tariffs on hold for 90 days and struck tentative deals with the U.K. and China, which sent stocks rebounding.

Investors have been buying stocks on speculation that more deals with more countries will be implemented during the three-month break. Trump’s actions on Friday may mean that hope was unfounded.

Analysts say investors are also concerned about recent movements in the US debt market. US bond yields reached their highest levels in several months this week.

"For equities, we believe the recent rebound is close to completion. While valuations have rebounded, downside risks dominate. These include a potential further rise in US bond yields, weakness in US macroeconomic data and a renewed increase in trade policy risks," said Karsten Junius, chief economist at Bank J. Safra Sarasin.

“The bond market is talking, the equity markets are not listening at the moment. All these changes that are being introduced, whether it’s the tax bill, tariffs, etc., these are pro-inflationary measures,” Thomas Taw, head of Asia-Pacific investment strategy at BlackRock Asset Management, said in an interview with Bloomberg TV.

Next week, investors will be awaiting the publication of results from Nvidia, whose shares fell by more than 1 percent at the close of Friday's session.

“All eyes will be on Nvidia’s report. The whole AI story has been a major driver of the market, and Nvidia is at the epicenter of that narrative,” said Chuck Carlson, CEO of Horizon Investment Services.

“Given the size of the company and the attention it is getting, there will be a lot of people who will want to know what happens with the shares,” said Wasif Latif, chief investment officer at Sarmaya Partners.

Apple shares fell 3% after Trump posted on Truth Social that iPhones sold in the U.S. must be made in the U.S., and if they are not, "Apple must pay tariffs of at least 25%." Trump's move against Apple is the first against a specific company as part of his rollout of tariffs this year.

U.S. new home sales in April came in at an annualized rate of 743,000, down from an expected 695,000. A month earlier, sales were 670,000, revised from 724,000.

In month-to-month terms, sales rose by 10.9 percent, compared to a 2.6 percent increase in the previous month, after a revision from 7.4 percent. Analysts expected -4.0 percent.

On the oil market, WTI futures for June are up 0.67 percent to USD 61.60 per barrel, while July Brent futures are up 0.71 percent to USD 64.90 per barrel. (PAP Biznes)

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