Investors remained cautious Friday as they wait to see if the Trump administration’s efforts to cool trade tensions with key U.S. economic partners will bear fruit.
Both the S&P 500 and tech-heavy Nasdaq Composite were roughly flat on Friday, while the Dow Jones Industrial Average fell 119 points, or 0.3%, to 41,249.
Although stocks have largely rebounded from an epic drop in early April following President Trump’s announcement of his “Liberation Day” tariffs on most of the world’s countries, signs of a downshift in U.S. economic growth have investors worried.
“There’s a growing concern that weakening soft data, like sentiment and confidence, will eventually show up in the hard data, like retail sales, GDP and employment,” Bret Kenwell, an analyst with investment platform eToro USA, told CBS MoneyWatch.
Wall Street is talking some comfort from the Trump administration moving this week to de-escalate its trade disputes. Mr. Trump on Friday floated a possible move to drop U.S. tariffs on China to 80% from their current level of 145%. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to meet Chinese officials in Switzerland on Saturday for a first round of trade talks.
Mr. Trump on Thursday also announced the framework for a trade pact with the U.K., touting the deal as a “breakthrough” agreement that would open the British economy to American goods.
Yet some market watchers are skeptical that the deal with Britain, which leaves in place a 10% U.S. tariff on British imports, will do much to ease global trade tensions — especially with far more challenging negotiations ahead with trading partners such as Canada, China and the European Union.
“We doubt that the U.K.-U.S. trade deal announced yesterday will be a game-changer for the economic outlook of either country,” Giulia Bellicoso, market economist with Capital Economics, said in a report.
Craig Singleton, senior China fellow at the Washington-based think tank Foundation for Defense of Democracies, also questioned whether the U.S. talks with Chinese negotiators this weekend will break the logjam.
“These are talks about talks, and China may be coming to assess what’s on the table — or even just to buy time,” he told the Associated Press. “There’s no shared roadmap or clear pathway to de-escalation.”
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