US markets experienced a slight downturn Friday, reflecting broader concerns about Washington’s increasingly unilateral trade policies. The Dow Jones Industrial Average closed at 49,359 points, a decrease of 0.2% from the previous day’s close. The S&P 500 edged down 0.1% to approximately 6,940, with the Nasdaq 100 also showing a similar decline at around 25,529.
This marginal retreat follows a week marked by escalating tensions and unconventional diplomatic maneuvers. Canada, historically a vital trade partner of the United States, is actively exploring alternative economic alliances, exemplified by Prime Minister Mark Carney’s recent, high-profile visit to China – the first by a Canadian Prime Minister since 2017. This trip culminated in a trade agreement focusing on battery-electric vehicles and rapeseed, signalling a determined effort to diversify away from reliance on US markets. The move is particularly salient given President Trump’s increasingly assertive rhetoric regarding trade disputes and territorial ambitions, including provocative suggestions of incorporating both Canada and Greenland as U.S. states – the latter accompanied by veiled threats of tariffs against any opposition.
Observers view Canada’s shift as a tacit rebuke of Trump’s protectionist policies and a clear indication of growing unease amongst Washington’s traditional allies. These anxieties are amplified by the ongoing standoff surrounding the legality of Trump’s tariffs. The Supreme Court’s protracted deliberation regarding the application of the International Emergency Economic Powers Act (IEEPA) of 1977, which could potentially validate the tariffs as a response to an “unusual and extraordinary threat” has injected further uncertainty into the financial landscape. The delay itself is a source of political friction, suggesting internal divisions even within the judicial branch.
The euro weakened slightly against the dollar, trading at $1.1602, reflecting the continued volatility triggered by geopolitical and trade-related uncertainties. Gold prices also fell, reaching $4,587 per fine ounce, a 0.7% decrease, as investors sought safer havens amidst the escalating trade tensions. Conversely, crude oil prices rose, buoyed by concerns of supply disruption linked to ongoing geopolitical instability and potential trade wars, trading at $64.08 a barrel of Brent crude. The contrasting performance of gold and oil highlights the complex interplay of factors influencing global markets and the precarious nature of economic stability in an era of heightened political risk.