Futures for the S&P 500 and the Dollar Fall as Trump Renews Tensions Over Tariffs

Stock-index futures declined and the U.S. dollar weakened after President Donald Trump signaled his administration could begin sending official notices to trading partners as soon as Friday, detailing the tariffs they may face when doing business with the United States. His remarks came ahead of the looming July 9 deadline for finalizing trade talks.

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Speaking to reporters on Thursday, Trump said, “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 U.S.” This comment suggests that the White House is preparing to take a more assertive stance, even if formal trade agreements are not reached before the deadline.

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Although U.S. equity markets had just finished at record highs in a shortened holiday trading session on Thursday, Trump's latest remarks sparked fresh concerns about global trade stability. The S&P 500 has climbed 26% from its low in April, largely driven by optimism that the president had scaled back his earlier aggressive tariff proposal unveiled on April 2. That initial plan had raised import taxes to their highest levels in over a century, rattling markets.

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However, Trump’s recent comments have reintroduced a new layer of uncertainty. His announcement implied that the chances of comprehensive trade deals being finalized before the deadline are slim. As a result, financial markets are once again preparing for a wave of unilateral tariff hikes.

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Deutsche Bank strategist Jim Reid pointed out that Trump also mentioned the potential tariff rates could vary significantly, ranging from 10% to as high as 60% or 70%. “So definitely one to keep an eye on, as the difference in that range would have significant economic implications for the various countries,” Reid cautioned.

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While U.S. bond and equity markets remained closed on Friday in observance of Independence Day, futures trading continued. Early in the day, the E-mini S&P 500 futures contract dropped by 0.6%, indicating that traders were largely ignoring the recent passage of a major Republican-backed tax bill and were more focused on the rising trade tensions.

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In currency markets, the U.S. dollar also showed weakness. It slipped 0.4% against the Japanese yen and dropped 0.2% in value versus the euro. The shift reflects growing investor caution amid concerns over how new tariffs could impact global commerce.

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International equity markets also reacted negatively to Trump’s tariff threat. Countries seen as more vulnerable to U.S. trade policy faced steeper losses. South Korea’s KOSPI Composite Index tumbled 2%, Germany’s DAX index fell 0.7%, and France’s CAC 40 slid 0.9% by the middle of the European trading session. These declines came despite Wall Street's strong finish the day before.

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Kathleen Brooks, research director at XTB, noted that “risk sentiment is draining from markets.” She interpreted Trump’s comments as a signal that the president has likely given up on securing last-minute trade agreements before the deadline. “This suggests that at this late stage he is willing to play hardball rather than negotiate,” Brooks said.

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The reemergence of tariff fears sparked declines in commodity markets as well. Copper futures fell 1.6%, as investors anticipated slower industrial demand due to reduced trade activity. Oil futures were also down by 1.3%, driven by expectations that global growth could be weakened if broad-based tariffs take effect.

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Susannah Streeter, head of money and markets at Hargreaves Lansdown, remarked, “Optimism is evaporating at the end of the week, as the U.S. tariff deadline looms and the signs are that many countries will face higher duties than expected.”

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In the cryptocurrency space, Bitcoin was not immune to the risk-off sentiment. It dipped 0.8% amid the global financial unease. Gold, which typically acts as a safe haven during uncertain times, initially rose but then gave up its gains, ending the day flat around $3,342 an ounce.

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Overall, the markets are responding cautiously as the July 9 deadline draws near. Investors are increasingly concerned that the U.S. administration’s aggressive stance could result in a new round of tariffs that may hit global trade and economic growth hard. While the stock rally fueled by tax reform and a softer trade tone had pushed major indexes to record highs, renewed threats of unilateral tariffs are now casting a shadow over that momentum.

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