(Bloomberg) — US stock futures retreated and the dollar strengthened after President Donald Trump ratcheted up trade tensions yet again by suggesting higher tariff rates on most trading partners.
Contracts for the S&P 500 fell 0.4% and a gauge of the dollar rose 0.2% after Trump said in an interview with NBC News Thursday he plans to impose blanket levies of 15% or 20%. The current blanket tariff rate is 10%. The president plans to make a “major statement” on Russia and he is also mulling the use of sanctions.
The Canadian dollar weakened after Trump said he will impose 35% levy on some goods from the country. Gold rose for a third day as investors sought haven assets. Asian equities advanced 0.5%, led by cyclical stocks. Goldman Sachs Group Inc. strategists raised their forecast for Asia ex-Japan stocks, citing a more favorable macro environment and lower tariff risk.
“The latest news of a higher tariff rate on Canada and potentially others as well has seen risk getting pared back,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group Ltd. “We are likely to see more risk aversion across Asia as investors pare back their positions ahead of the weekend, to avoid any whiplash that could occur next week on further tariff news over the next couple of days.”
Tariff tensions have increased recently as Trump pushed ahead with his plans to impose levies on various trading partners in a bid to remake the global trade, which he says wasn’t favorable to the US. Even so, investors have been piling back into stocks – the S&P 500 closed at a record Thursday – in a sign investors are shifting their focus from concerns about lower growth and higher inflation to prepare for the upcoming earnings season.
The levy on Canada is a blow to Prime Minister Mark Carney’s bid to avoid punishing levies on goods sold to the US. The tariff level would take effect from Aug. 1.
The announced rate is an increase from the current 25% levy on Canadian imports not covered by the trade deal negotiated between the US, Canada and Mexico, which do not face additional tariffs. That exclusion would remain unchanged, according to a official, who spoke on condition of anonymity to discuss the matter.
“Markets are likely to be concerned about further escalations given that Canada has retaliated before,” said Fiona Lim, a senior strategist at Malayan Banking Bhd in Singapore. “Given that US dollar has fallen substantially in the first half of the year, we could be seeing some unwinding of short US dollar positions amid intermittent tariff announcements.”
Trump’s moves signal no retreat from his flagship economic policy, with the president noting to NBC the recent rise in US equity markets. The president has spent the week sending missives to trading partners, informing them of new rates that will kick in on Aug. 1 if they cannot negotiate better terms. Letters to members of the European Union are also expected shortly.
Separately, Hong Kong authorities intervened for the fourth time in two weeks to prevent the city’s currency from weakening beyond its official trading band.
In China, after years of mounting concern over deflation and the bruising price wars that have plagued much of China’s economy, President Xi Jinping’s government is showing signs of finally taking action.
Elsewhere, JPMorgan Chase & Co. is considering cutting the weight of bond issuers in its emerging-market index — including China and India — as it seeks to reflect a broader range of developing-nation debt.
Corporate Highlights:
- Nissan Motor Co. raised $4.5 billion from a junk-bond sale in US dollar and euros. The embattled automaker is offering a record-high coupon on at least one part of the deal to drum up demand.
- Asian airline stocks gain after Delta issued a strong earnings outlook and said vacationers are coming back.
- Northern Rare Earth and other Asian shares tied to critical minerals follow US peers higher after MP Materials secured a $400 million equity investment from the US Department of Defense.
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.4% as of 10:55 a.m. Tokyo time
- Japan’s Topix rose 0.8%
- Australia’s S&P/ASX 200 fell 0.2%
- Hong Kong’s Hang Seng rose 1.1%
- The Shanghai Composite rose 0.3%
- Euro Stoxx 50 futures fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.2% to $1.1678
- The Japanese yen fell 0.3% to 146.73 per dollar
- The offshore yuan was little changed at 7.1777 per dollar
Cryptocurrencies
- Bitcoin rose 2% to $115,896.42
- Ether rose 4.5% to $2,946.35
Bonds
- The yield on 10-year Treasuries was little changed at 4.36%
- Japan’s 10-year yield was unchanged at 1.490%
- Australia’s 10-year yield advanced four basis points to 4.32%
Commodities
- West Texas Intermediate crude rose 0.8% to $67.07 a barrel
- Spot gold rose 0.2% to $3,329.37 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson, Matthew Burgess and Mark Cranfield.
©2025 Bloomberg L.P.