The S&P 500 ended another turbulent week on an upbeat note Friday, but major indexes posted their worst week of losses since early February as President Donald Trump’s threat to impose import tariffs on steel and aluminum rattled investors.
The gains on Friday came as investors who had been spooked by the prospect of a global trade war backed off those concerns and noted a trade war was far from certain at this point.
Trump on Thursday threatened a 25 per cent tariff on steel imports and 10 per cent on aluminum without exemptions for any countries, igniting a selloff in a market already on edge over rising US interest rates and bond yields.
Trump struck a defiant tone on Friday, saying trade wars were “good, and easy to win”, and US Commerce Secretary Wilbur Ross, appearing on CNBC, said tariffs would have a “trivial effect.”
Phil Orlando, chief equity strategist at Federated Investors in New York, said Trump’s announcement was made to call everyone’s attention to the US trade deficit but investors decided that a full-blown global trade was not going to happen.
“For a real estate guy like that, you pound the podium, you rattle some sabers, you get everybody’s attention and then you negotiate back to some reasonable midpoint.”
The tariffs could dampen profits for everything from car makers to beer companies and result in higher prices for consumers, reports Reuters.
Shares of big US steel companies and manufacturers were under pressure on uncertainty over the effects of tariffs.
Shares in Caterpillar, a buyer of raw materials and a big exporter of construction machinery products, were down 2.6 per cent after falling 2.8 per cent in the previous day’s session. General Motors was down 1 per cent.
