May 27, 2025

The market fell Friday after President Donald Trump threatened 50% tariffs on the European Union that could begin in a little more than a week.

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The Dow collapsed by 256 points to 41,603 led by selling once again in AAPL, in addition to MSFT, CRM, HD and V. The S&P closed out its worst week in the last seven with a 39 point decline to 5802 on losses in technology and some industrials.

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The Nasdaq got clocked for 188 to 18,737 as further declines in technology were exacerbated by TSLA and BKNG while the Russell 2000 Index of small stocks dropped by 6 to 2039.

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And how about the VIX, which should have risen on selling in stocks, had the nerve to fall to 20.57, probably on anticipation of things doing better today after some new developments over  the weekend.

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Trump threatened the tariffs before the U.S. stock market opened, saying on his Truth Social platform that trade talks with the European Union “were going nowhere” and that “straight 50%” tariffs could go into effect on June 1. The European Union is one of the United States’ largest trading partners.

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The S&P 500 lost as much as shortly after trading began, but it pared its loss as traders weighed whether Trump’s latest threats were just negotiating tactics aimed in hopes of getting a deal or something more, and it looks like this strategy is going to work, at least for one day.

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Apple dropped for the eighth straight day and was the heaviest weight on the S&P 500 Trump went after the company specifically. He said he has been pushing Apple CEO Tim Cook to move production of iPhones to the United States, and he warned a tariff “of at least 25% must be paid by Apple to the U.S.” if it doesn’t.

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Trump later clarified his post to say that all smart phones made abroad would be taxed and the tariffs could be coming as soon as the end of June.

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“It would be also Samsung and anybody that makes that product,” Trump said. “Otherwise, it wouldn’t be fair.”

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Trump has been criticizing companies individually when he’s frustrated with how they are acting because of his tariffs and because of the uncertainty his trade war has created. He earlier WMT it should “eat the tariffs” along with China, after the retailer said it would likely have to raise prices to cover the increased cost of imports.

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DECK, the company behind the Hoka and Uggs brands, became one of the latest companies to say all the uncertainty about the economy means it won’t offer financial forecasts for the full upcoming year. Instead, it gave forecasts only for the upcoming quarter, and they fell short of analysts’ expectations for revenue and profit. That sent its stock down 20%, even though the company reported a stronger profit and revenue for the latest quarter than expected.

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ROST fell 10% after it pulled its financial forecasts for the full year, citing how more than half the goods it sells originate in China. “As such, we expect pressure on our profitability if tariffs remain at elevated levels,” its C.E.O said.

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The off-price retailer gave a forecast for profit in the current quarter that included a hit taken from tariffs, and it fell short of analysts’ expectations. That dragged its stock down even though the company also reported a better profit for the latest quarter than expected.

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On the winning side was INTU, which gained 8%, which rose 8% after the company behind TurboTax and Credit Karma reported a stronger profit for the latest quarter than analysts expected. Perhaps more importantly, it also raised its forecasts for revenue and profit over its full fiscal year.

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Stocks in the nuclear industry also rallied after Trump signed executive orders to speed up nuclear licensing decisions, among other measures meant to charge up the industry. OKLO, which is developing fast fission power plants, jumped 23%.

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Trump’s latest tariff threats stirred things up after it had recovered most of the losses it had earlier taken because of the trade war. The S&P dropped almost 20% below its record at one point last month, when worries were at their height about whether Trump’s stiff tariffs would cause a global recession. The index then rose back to within 3% of its all-time high last Monday after Trump paused his tariffs on many countries, most notably China.

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In the bond market, Treasury yields fell after swinging back and forth a few times. The yield on the 10-year Treasury eased to 4.51% from 4.54% late Thursday.

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And continuing the recent drama, European shares closed higher and U.S. futures surged Monday after President Trump said he would delay a threatened 50% tariff on goods from the European Union to July 9th.

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Trump announced the decision to push back the higher import duties after a call Sunday with Ursula von der Leyen, the president of the European Commission, who said she “wants to get down to serious negotiations,” according to the U.S. president’s retelling.

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On Monday, the E.U. chief trade negotiator said he had “good calls” with U.S. officials and that the E.U. was “fully committed” to reaching a trade deal by the July 9 deadline.

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Just last week, Trump had said on social media that trade talks with the European Union “were going nowhere” and that “straight 50%” tariffs could go into effect on June 1st.

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Markets welcomed the news with U.S. futures advancing strongly.

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Asian trading, Tokyo’s Nikkei 225 climbed 1% to 37,531.53, while the Kospi in Seoul picked up 2% to 2,644.40.

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Earnings this week include: today – AZO higher, PDD lower ; tonight - OKTA; Wednesday – the always important NVDA and CRM plus DKS and M; Thursday – COST, DELL, GPS, NTAP, ULTA, Zscaler.

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Economic reports will have: today – preliminary April durable goods orders improved to -6.3%, May Consumer Confidence rose to 98; Wednesday – minutes of last Fed meeting; Thursday – weekly jobless claims, second estimate of Q1 G.D.P; Friday – April personal income and spending, May U. of Michigan Consumer Sentiment Index, April P.C.E. Index.