After a seesaw week punctuated by cautious optimism on inflation data and company earnings, Wall Street turned deeply negative on Friday, as new trade tensions rattled investors. Rekindled worries about a U.S.-Europe trade clash led to a widespread decline in stocks. A sell-off after President Donald Trump called for a 50% tariff on European Union imports capped a losing week for major indexes.

The Dow Jones Industrial Average fell 256 points, or 0.6%, to end at 41,603.07. The S&P 500 dropped 39.19 points, or 0.67 percent, to close at 5,802.82. The Nasdaq Composite fell 188.53 points, or 1 percent, to close at 18,737.21. For the week, the S&P 500 lost 2.61 percent, the Dow declined 2.47 percent, and the Nasdaq dropped 2.48 percent as investors fretted about global trade uncertainty.
Tech, communication services, and consumer discretionary stocks were among the biggest losers, with some of those companies, including Amazon, Nvidia, and Meta, falling more than 1%. Apple slid 3% to a two-week low after Trump said the U.S. may impose 25% tariffs on iPhones imported from China. The comment revived fears over global supply chains and their susceptibility to political decisions.
"Here we go again," said James St. Aubin, CIO at Ocean Park Asset Management. "Every time it looked like the tariff talk was behind us, it was back." This brings the anxiety around trade and its potential knock-on impact on corporate profits back to life.
Even with tech in the dumps, defensive sectors such as utilities, energy, and consumer staples made some gains as investors sought refuge there. However, shares of semiconductor companies, often regarded as a gauge of global growth, experienced a 1.5% decline. The Philadelphia Semiconductor Index, which tends to be sensitive to disruptions in global trade flows, reflected worries about that possibility.
The 10-year U.S. Treasury yield, meanwhile, fell 4.4 basis points to 4.509% after reaching multi-month records recently. As equities fluctuated, traders noted that the falling yields signaled a rush into bonds.
In Washington, Treasury Secretary Scott Bessent supported Trump's hardline, saying the European Union's trade proposals were without substance. He further stated that the threat of tariffs could potentially ignite tensions with the EU during future negotiations.
The CBOE Volatility Index, or VIX, a measure sometimes called Wall Street's "fear gauge," rose 10% to its highest level in more than two weeks. Volume continued to be heavy, with 17.67 billion shares changing hands on the New York Stock Exchange, although that was just below the daily average over the last two weeks.
Noteworthy movers included Deckers Outdoor, which fell 20% on soft guidance as well as its decision to not provide full-year forecasts due to trade uncertainty. Nike also dropped 2.1%, weighed down by broader weakness in the consumer sector.