U.S. Stocks Fall 250 Points as Trump Announces 35% Tariff on Canada

U.S. stocks experienced a decline on Friday, with the Dow Jones Industrial Average opening 250 points lower following President Donald Trump’s announcement of a 35% tariff against Canada. This move came as Bitcoin surged to $118,000, providing a boost to cryptocurrency-related stocks. The tariff threat, which initially targeted copper imports with a proposed 50% levy, has raised concerns about increased costs for U.S. manufacturers and consumers. The market's reaction to these tariffs was evident as the S&P 500 pared gains at -0.5%, and the Nasdaq Composite shed 0.3%.

Bitcoin's rally lifted crypto stocks, with MicroStrategy (MSTR), Coinbase (COIN), and Robinhood (HOOD) gaining in premarket trading. MSTR was up 2% in early trading after the U.S. stock market opened, while COIN and HOOD had pared their premarket gains. Ethereum (ETH) also crossed above the psychological $3,000 level, ignited by Bitcoin’s performance.

Trump’s 35% tariff on Canadian goods, announced on Thursday and set to kick off in August, came days after the U.S. president’s latest threats. This followed President Trump’s announcement of a 50% duty rate on Brazil earlier in the week. While Trump has added to the jitters with remarks that he sees another 15% to 20% blanket tariffs against many of the U.S. trading partners, stocks remain near their all-time highs. Overall investor optimism, however, may dissipate if there’s a flare-up in trade wars—a scenario recently warned of as Trump threatened tough tariffs on members of the emerging market economics bloc.

The tariff threats have created a ripple effect across different sectors, with semiconductors and pharmaceuticals also facing potential duties. This has led to a broader market uncertainty, as investors grapple with the potential implications of these trade policies. The anticipated deregulation push, which was expected to benefit small-cap stocks, big banks, oil drillers, and even the cryptocurrency sector, has been overshadowed by the tariff announcements. The market's response to these developments has been mixed, with some sectors showing resilience while others face significant headwinds.

The tariff threats have also sparked reactions from various stakeholders, including lawmakers and industry leaders. The escalating trade tensions have added to the market's volatility, as investors reassess their positions in light of the potential economic impact. The situation remains fluid, with ongoing developments and potential shifts in policy that could further influence market dynamics. As the market continues to navigate these challenges, the focus will be on how companies and investors adapt to the changing landscape and the potential long-term effects on the economy.