The U.S. stock market declined at the end of Friday after President Donald Trump announced increased Canadian import tariffs while suggesting additional trade restrictions which created market uncertainty among investors who already faced ongoing trade disputes.
The S&P 500 index decreased by 0.27% while the Dow Jones Industrial Average dropped 0.68% because the materials sector experienced the largest decline due to supply disruption concerns. Trump announced that Canadian tariffs will increase to 35% in August from their current 25% level and he threatened to impose higher rates if Ottawa responds with retaliatory measures.
The president suggested implementing 15% to 20% tariffs against most U.S. trading partners which created market uncertainty despite recent market stabilization after spring’s volatile period. The market expects additional trade shocks because the European Union received word that Washington will send an official letter about new trade duties.
The overall market decline did not affect the stability of technology stocks. The stock price of Nvidia reached its highest point ever while becoming the first company to reach a $4 trillion market value which helped maintain the Nasdaq at 20,633.
The market reaction to previous tariff announcements has become less intense according to analysts who believe investor fatigue is developing. “Markets appear more desensitized,” said one strategist. The situation remains dangerous if the conflict continues to escalate.
