Tariff jitters push futures lower despite Wall Street records
Trump's 35% Canada tariffs and EU threats rattle markets as Bitcoin soars to fresh highs above $113,000.
Fresh tariff threats rattle nerves
Trump's latest trade salvo caught markets off guard on Friday, with the president announcing 35% tariffs on Canadian imports from 1 August and threatening similar measures against the EU. The move represents a significant escalation from the current 10% baseline rate, with Trump floating the possibility of 15-20% tariffs on other countries.
US futures tumbled 0.4% in Asian trading, with both Nasdaq 100 and S&P 500 futures falling as investors digested the implications. European futures also dropped 0.4% as the prospect of EU tariffs loomed large.
Despite official clarifications that goods covered by the United States-Mexico-Canada Agreement would likely be exempt, the threat of broader tariff escalation continues to weigh on sentiment.
Bitcoin surges to fresh records
While traditional markets grappled with tariff uncertainty, Bitcoin provided a bright spot by surging to fresh record highs above $113,000.00. The cryptocurrency has been on a remarkable run, having first crossed $100,000.00 in December before trading sideways around $110,000.00 in May.
The latest surge reflects growing institutional adoption, with new Bitcoin exchange-traded funds making it easier for both retail and institutional investors to gain exposure. Trump's pro-crypto stance has also provided tailwinds, with the president seeking to establish a strategic cryptocurrency reserve.
The appointment of crypto-friendly officials like SEC Commissioner Paul Atkins and White House AI czar David Sacks has further boosted sentiment.
Wall Street resilience continues
Despite the tariff drama, Wall Street showed remarkable resilience on Thursday. The S&P 500 closed up 0.27% at a fresh record high, while the Nasdaq gained 0.09% to reach new peaks. The standout performer was Nvidia, which made history by closing with a market valuation above $4 trillion.
Key earnings and data loom next week
Next week brings crucial tests for market sentiment as second-quarter earnings season kicks off with JPMorgan on Tuesday. This will provide the first major insight into how Trump's trade policies are affecting corporate America's profitability.
The June Consumer Price Index report, also due Tuesday, will be equally important for gauging inflationary pressures. Early warnings from retailers like Uniqlo's parent company, which saw shares tumble 7% after flagging tariff impacts, suggest some sectors face genuine headwinds. The question is whether other companies can continue delivering strong results despite ongoing trade uncertainty.
Currency volatility creates opportunities
The US dollar's strength against the Japanese yen continues, with USD/JPY approaching 147.12 and posting its biggest weekly gain this year at 1.7%. The yen has now weakened for seven straight weeks against the euro, hitting five-month lows against the Australian dollar.
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