(Bloomberg) — Stocks fell along with equity-index futures as President Donald Trump ratcheted up trade tensions again ahead of next week’s deadline for higher tariffs.
A gauge of Asian equities retreated 0.3%, with South Korean shares leading with a 1.6% drop. Trump said his administration may begin sending out letters to trading partners as soon as Friday, setting unilateral tariff rates, ahead of the July 9 deadline for negotiations. Equity-index futures for the US and Europe both declined by 0.3%. Gold rose 0.5% while the dollar dipped 0.2%. There’s no cash trading in Treasuries due to a holiday in the US Friday.
Investors are staying on the sidelines awaiting outcomes from various trade negotiations amid the current pause on Trump’s April tariffs, which he put on hold for 90 days to allow time for talks. Stocks have rallied to record highs as initial concerns that the levies will push the US into a recession have eased. On Thursday, the US jobs growth exceeded expectations and all but erased bets for a July rate cut.
“There is still uncertainty out there, but one thing we do know is the US economy seems to be holding up relatively well,” said Tony Sycamore, market analyst at IG Australia.
Trump has long threatened that if countries fail to reach deals with the US before next week’s deadline, he would simply impose rates on them, raising the stakes for trading partners who have rushed to secure agreements with his administration.
“We’re probably going to be sending some letters out, starting probably tomorrow, maybe 10 a day to various countries saying what they’re going to pay to do business with the US,” Trump said.
In separate remarks, Trump said the countries will start paying tariffs on Aug. 1, but declined to comment on which nations will get the letter.
Investors such as Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. in Singapore, are holding more cash and waiting for Monday to see how the market reacts.
“Portfolio has more cash than normal times for now,” he said. “I find too much optimism among other managers a bit uncomfortable,” he said about trimming some equities exposure to shield from potential drop in the market.
Meanwhile, Japanese Prime Minister Shigeru Ishiba pushed back against the idea there has been little progress in negotiations with the US on a trade deal as a deadline looms for a 24% across-the-board tariff to take force.
Investors are cautious about the US sending out letters to trading partners, said Yugo Tsuboi, chief strategist at Daiwa Securities.
“The reason why market sentiment has not been as strong as it should have been is because of the trade negotiations,” Tsuboi said. Japanese stocks dipped 0.1%.
Treasuries fell and the dollar rose Thursday in a sign traders see less pressure on the Federal Reserve to cut interest rates after US jobs in June. Swap traders saw almost no chance of a July Fed cut, compared with a roughly 25% probability seen before the data. The chance of a move in September ebbed to about 70%.
Meanwhile, Trump secured a sweeping shift in US domestic policy as the House passed a $3.4 trillion fiscal package that cuts taxes, curtails spending on safety-net programs. A $5 trillion increase in the US debt limit in the package eliminates the risk of a market-rattling payment default the Treasury had forecast could come as soon as mid-August without congressional action.
The president said he plans to sign the bill on Friday at a 4 p.m. ceremony at the White House.
Separately, the Chinese government intends to cancel part of a two-day summit with European Union leaders planned for later this month, in the latest sign of the tensions between Brussels and Beijing.
In commodities, oil steadied before an OPEC+ meeting that’s set to deliver another oversized production hike, threatening to swell a glut forecast for later this year.
Corporate Highlights:
- India’s regulator temporarily barred Jane Street Group from accessing the local securities market. Jane Street disputed the regulator’s findings.
- Singapore introduced fresh measures to tame housing prices.
- Hong Kong developer New World Development Co. is returning to the spotlight this month as investors’ focus turns to its plan to raise as much as $2 billion through a new loan
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.3% as of 1:32 p.m. Tokyo time
- Japan’s Topix fell 0.3%
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng fell 0.6%
- The Shanghai Composite rose 0.4%
- Euro Stoxx 50 futures fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.1% to $1.1774
- The Japanese yen rose 0.3% to 144.44 per dollar
- The offshore yuan rose 0.1% to 7.1629 per dollar
Cryptocurrencies
- Bitcoin fell 0.7% to $109,242.01
- Ether fell 0.8% to $2,579.58
Bonds
- Japan’s 10-year yield advanced one basis point to 1.450%
- Australia’s 10-year yield advanced two basis points to 4.20%
Commodities
- West Texas Intermediate crude fell 0.2% to $66.86 a barrel
- Spot gold rose 0.4% to $3,340.86 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Joanne Wong, Winnie Hsu and Momoka Yokoyama.
©2025 Bloomberg L.P.