Stock market today: Dow, S&P 500, Nasdaq trim losses as Trump threatens Apple, EU with new tariffs

US stocks closed lower Friday, with the Dow, S&P 500, and Nasdaq all declining and on track for weekly losses, driven by renewed tariff threats from President Trump and concerns over the economic impact of his tax bill. Trump's threat of a 25% tariff on iPhones and other cell phones made outside the US, specifically mentioning Apple and Samsung, sent Apple shares down 3% and added to broader market anxieties. Rising Treasury yields, fueled by deficit concerns related to the tax bill, further weighed on sentiment, with the 30-year yield holding above 5%.

Analysis

US equity markets concluded Friday on a weaker note, with the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) declining by approximately 0.3%, and the tech-heavy Nasdaq Composite (^IXIC) falling around 0.6%, setting these major indices on a path for weekly losses. The downturn, underscored by a strongly negative sentiment score of -0.75, was largely attributed to President Trump's renewed tariff threats and ongoing investor apprehension regarding the potential economic fallout from his significant tax bill. Specifically, Trump's pronouncement that Apple (AAPL) would be subjected to a 25% tariff on iPhones sold within the US but manufactured externally, a threat he indicated could extend to other phone manufacturers like Samsung, precipitated a 3% drop in Apple's stock and intensified concerns about disruptions to global supply chains. Further unsettling markets, Trump also threatened to impose a 50% tariff on EU imports starting June 1. Concurrently, anxieties that the tax legislation could inflate the US deficit by trillions have fueled a rise in Treasury yields, with the 30-year yield (^TYX) maintaining a position above the critical 5% level—a high not witnessed since the financial crisis, and an issue previously highlighted by a Moody's downgrade. This climate of uncertainty has prompted several companies to refrain from issuing full-year financial guidance. Market participants are also looking ahead to Nvidia's (NVDA) earnings report, with options traders pricing in expectations of lower stock volatility post-announcement compared to recent quarters, even as the chipmaker navigates trade policy headwinds and debates surrounding AI investment costs.

Key Decisions for Investors

• Investors should critically assess portfolio exposure to companies with significant international manufacturing and US sales, such as Apple, given the direct negative impact of announced tariffs and the potential for broader application.
• The persistence of the 30-year Treasury yield above 5%, driven by fiscal deficit concerns, warrants close monitoring as it may signal heightened risk aversion and exert downward pressure on equity valuations.
• Consider adopting a more defensive stance or reallocating towards companies less vulnerable to trade disputes and fiscal policy uncertainties, as corporate earnings guidance is becoming less predictable.
• While Nvidia's upcoming earnings are a key focus, particularly given its role in AI, note that options markets currently anticipate reduced post-earnings stock volatility, which could inform trading or hedging strategies around the event.