U.S. stocks are down in early trading Friday, pulling the market back from all-time highs, as the Trump administration escalates its tariff threats against Canada.
The S&P 500 was down 0.4% a day after setting a record high. The benchmark index is on pace to post its first weekly loss in three weeks.
The Dow Jones Industrial Average was down 257 points, or 0.6%, as of 10:04 a.m. Eastern time, and the Nasdaq composite was 0.2% lower a day after climbing to an all-time high. Both indexes are also headed for weekly losses.
Bond yields were mostly higher. The yield on the 10-year Treasury rose to 4.40% from 4.34% late Thursday.
Trump said in a letter Thursday that he will raise taxes on many imported goods from Canada to 35%, deepening the rift between the longtime North American allies. The letter to Canadian Prime Minister Mark Carney is an aggressive increase to the top 25% tariff rates that Trump first imposed in March.
The move is the latest bid by the White House to use threats of higher tariffs on goods imported into the U.S. in hopes of securing new trade agreements with countries around the globe, even historically close trading partners like Canada.
The administration had initially set Wednesday as a deadline for countries to make deals with the U.S. or face heavy increases in tariffs. But with just two trade deals announced since April, one with the United Kingdom and one with Vietnam, the window for negotiations has been now been extended to Aug. 1.
Trump also floated this week that he would impose tariffs of as much as 200% on pharmaceutical drugs and placed a 50% tariff on copper imports, matching the rates charged on steel and aluminum.
Wall Street has been relatively stable in recent weeks, with stocks steadily rising to record levels, appearing to take the unpredictability of Trump's tariff policies in stride after following wild swings after the tariffs were initially rolled out in the spring.
Trade policy aside, the market is now set to shift at least some of its focus on companies due to report quarterly earnings over the next few weeks.
On Friday, Levi Strauss jumped 8.2% after the jeans maker easily beat Wall Street’s sales and profit targets and raised its full-year forecast, despite expecting higher costs from tariffs.
Earnings season shifts into high gear next week with JPMorgan Chase, Wells Fargo and Citigroup among the big banks due to report their results on Tuesday.
Wall Street analysts predict that companies in the S&P 500 will deliver 5% growth in second-quarter earnings, according to FactSet. That would mark the lowest rate since the fourth quarter of 2023.
Shares of T-Mobile were largely unchanged after the Justice Department announced Thursday that it would not prevent the company from closing on its proposed $4.4 billion acquisition of U.S. Cellular. That deal, announced more than a year ago, had come under antitrust scrutiny from the Justice Department under President Joe Biden’s administration.
U.S. Cellular shares were up a 2.7%.
European stock indexes were lower following a mostly lower finish in Asian markets.
Meanwhile, bitcoin climbed to another all-time high Friday, briefly eclipsing $118,000 before easing back to $117,600, according to Coindesk.
Bitcoin's price jump came amid bullish momentum across risk assets and coincides with Nvidia's surge to a $4 trillion valuation. It also comes days before the U.S. Congress' Crypto Week on July 14, where lawmakers will debate a series of bills that could define the regulatory framework for the industry.
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