Markets Close Lower as Tariff Fears Linger All Eyes Turn to Nvidia

Stocks ended the week on a downbeat note Friday, with major indexes slipping as investor concerns over renewed trade tensions and underwhelming reassurances from Washington dampened sentiment heading into the Memorial Day weekend.

The Dow Jones Industrial Average closed down 256.02 points, or 0.61%, at 41,603.1. The Nasdaq Composite fell 188.53 points, or 1.00%, to 18,737.2, while the S&P 500 lost 39.19 points, or 0.67%, finishing at 5,802.82.

Market anxiety was driven by escalating tariff threats from President Trump, who earlier this week proposed steep duties targeting both European goods and Apple products assembled abroad. Treasury Secretary Scott Bessent attempted to tamp down fears in a Bloomberg TV interview Friday, but his tone appeared too soft to reverse the selling pressure.

Known as a moderating voice within the administration, Bessent acknowledged trade tensions but emphasized ongoing negotiations and policy continuity. He described the European Union’s position as hampered by a “collective action problem,” and sought to assure markets that talks with India and China were “far along”.

Still, investors remained skeptical. Despite Bessent’s trademark calm and policy hints intended to cool nerves, the market’s chilly response reflects a dynamic where words no longer suffice.

The lack of conviction in Bessent’s remarks was reflected in thin trading volumes and a cautious mood ahead of the long weekend. Many institutional investors were unwilling to add risk, especially with U.S.-EU trade friction unresolved and global retaliatory threats on the table.

Watch: Big Tech Risk & Recovery as Nvidia and other tech stars prepare to report earnings

Looking ahead, market focus shifts to Nvidia Corp., which will report earnings after the bell on Tuesday, May 28. The AI chip leader is expected to post strong growth, with analysts forecasting fiscal Q1 revenue of $43.3 billion—a 66% jump year over year—and adjusted EPS of $0.88.

Despite a stellar run, Nvidia's shares remain vulnerable to geopolitical risks and volatility. “Over the past eight quarters, NVIDIA’s stock price has experienced an average intraday volatility of 11.3% on the day following the earnings release,” noted Wallstreet Insight adding that this time, options markets are pricing in a possible 7.4% move in either direction.

Nvidia CEO Jensen Huang this week criticized U.S. export controls, saying they have “been a failure,” costing U.S. firms billions while failing to halt China’s progress in AI chip development. That geopolitical backdrop adds another layer of complexity to what is already one of the most closely watched earnings events of the quarter.

With fiscal policy questions unresolved, tariff concerns unresolved, and tech under pressure, investors are hoping Nvidia can offer more than just results—it may need to deliver reassurance.