Stocks drop on tariff whiplash, futures decline

“No matter what happens, markets realize that we are facing a long period of uncertainty,” said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co. “Allowing tariffs to remain in place raises risks of stagflation and is both dollar and equity negative.”

On Thursday, a federal appeals court offered Trump a temporary reprieve from a ruling threatening to throw out the bulk of his tariff agenda.

The administration celebrated the order from the US Court of Appeals for the Federal Circuit as validating its vow to aggressively challenge a ruling issued Wednesday night by the Court of International Trade blocking sweeping parts of Trump’s tariffs over his use of the International Emergency Economic Powers Act, or IEEPA.

White House officials said they planned to continue defending the legality of their efforts on trade to the US Supreme Court, and said that if they were stymied, Trump would simply pursue the same levies through other authorities.

“The first thought that came to mind when dissecting the rapidly evolving news flow around the tariff saga was that confusion in markets and in the business community must have reached a new extreme,” Chris Weston, head of research at Pepperstone Group, wrote in a note.

The Wall Street Journal reported that the administration is considering a stopgap effort to impose tariffs on swaths of the global economy under a never-before-used provision of the Trade Act of 1974. That includes language allowing for tariffs of up to 15% for 150 days to address trade imbalances with other countries.

Meanwhile, prices in Tokyo jumped the most in two years, in a worrisome sign for Prime Minister Shigeru Ishiba ahead of a summer election. High inflation and strong wage growth means the Bank of Japan is likely to hike in July and December, Kristina Clifton, a senior economist and strategist at Commonwealth Bank of Australia, wrote in a note to clients.

“However, for the BOJ, the risks are skewed toward less hikes because of the uncertain global backdrop and negative impacts of US tariffs on the Japanese economy,” Clifton wrote.

In weak economic data, recurring applications for US jobless benefits jumped to the highest level since November 2021, possibly presaging a rise in the unemployment rate this month.

US pending home sales dropped by the most since 2022 on higher borrowing costs.

In a face-to-face meeting at the White House, Trump pushed Fed Chair Jerome Powell to lower interest rates, believing he is making a mistake by not cutting borrowing costs.

Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.2% as of 10:59 a.m. Tokyo time
Japan’s Topix fell 0.7%
Australia’s S&P/ASX 200 was little changed
Hong Kong’s Hang Seng fell 1.4%
The Shanghai Composite fell 0.4%
Euro Stoxx 50 futures fell 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.1353
The Japanese yen rose 0.2% to 143.91 per dollar
The offshore yuan was little changed at 7.1841 per dollar

Cryptocurrencies

Bitcoin fell 0.5% to $105,668.84
Ether fell 1.7% to $2,597.73

Bonds

The yield on 10-year Treasuries was unchanged at 4.42%
Japan’s 10-year yield declined two basis points to 1.500%
Australia’s 10-year yield declined 11 basis points to 4.26%

Commodities

West Texas Intermediate crude fell 0.3% to $60.74 a barrel
Spot gold fell 0.2% to $3,309.86 an ounce