S&P 500 futures and dollar dip as Trump revives tariff tension

U.S. President Donald Trump gestures as he steps on stage to deliver remarks at the Salute to America Celebration at the Iowa State Fairgrounds in Des Moines on July 3, 2025. Trump earlier said he may be sending out tariff letters on Friday. - andrew caballero-reynolds/Agence France-Presse/Getty Images

Equity-index futures fell and the dollar dipped after President Trump said his administration may start sending out letters imposing unilateral tariffs on trading partners as early as Friday.

Ahead of his July 9 deadline for trade negotiations, the U.S. President told reporters on Thursday: “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.”

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U.S. stocks closed at record highs following a holiday-shortened session on Thursday. The S&P 500 SPX has surged 26% from its April low as investors welcomed Trump’s retreat from his original draconian tariff strategy announced on April 2 that pushed import levies to 131-year highs.

However, the President’s latest comments suggest few trade deals are likely to be struck before the April 9 deadline and now markets face increased tariff uncertainty once again.

Jim Reid, strategist at Deutsche Bank, noted that Trump later also said that the imposed tariffs, which may come into effect on August 1, could range in value from 10% to maybe 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,” said Reid.

U.S. equity and bond markets are closed for the Independence Day break, but stock-index futures are active, and the E-mini S&P 500 contract ES00 was 0.6% lower in early Friday action, with traders shrugging off news that the Republican’s big tax-cutting bill had been passed.

The U.S. dollar fell, down 0.4% versus the Japanese yen USDJPY, and losing 0.2% against the euro EURUSD.

Global stock markets were mostly on the back foot, despite Wall Street’s overnight record, with those countries arguably more vulnerable to a higher unilateral Trump tariff under most pressure. South Korea’s KOSPI Composite Index KR:180721 fell 2%, while Germany’s DAX DX:DAX was down 0.7% and the CAC 40 FR:PX1 in France lost 0.9% by mid afternoon in Europe.

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“[R]isk sentiment is draining from markets,” said Kathleen Brooks, research director at XTB. “President Trump seems to have called time on trade negotiations before next Wednesday’s deadline…This suggests that at this late stage he is willing to play hardball rather than negotiate,” she added.

Concerns that higher tariffs across a broad range of countries would stymie trade and weaken the global economy saw copper futures HG00 fall 1.6% and oil futures CL.1 drop 1.3%.

“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,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The mildly risk-off tone caused bitcoin BTCUSD to slip 0.8% but saw gold GC00 give up early gains to trade little changed at around $3,342 an ounce.

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