US stocks fell on Friday to register weekly losses as investors assessed President Trump's latest tariff threats and the potential impact of his massive tax bill on the deficit and the economy.
The Dow Jones Industrial Average ( ^DJI ) sank 0.6%. The S&P 500 ( ^GSPC ) also fell roughly 0.7%. The tech-heavy Nasdaq Composite ( ^IXIC ) backed off about 1%.
All three major averages fell more than 2% for the week.
The three indexes trimmed steeper losses that followed Trump's comment on Friday that Apple ( AAPL ) must pay a 25% tariff on iPhones sold but not made in the US. The tech giant has begun shifting some manufacturing to India, with China, home to its key suppliers, locked in a trade war with the US. Apple shares fell about 3%.
On Friday afternoon, Trump implied the tariffs would apply to other cell phone manufacturers.
"It would be more, it would be also Samsung and anybody that makes that product, otherwise it wouldn't be fair," Trump told reporters on Friday afternoon. "Again, when they build their plant here there's no tariffs. So they're going to be building plants here."
At the same time, Trump threatened to hike the tariff on EU imports to "a straight 50%" beginning June 1 as trade talks with the bloc have stalled.
The president's warnings shattered a more muted mood on Wall Street as investors wound down to the Memorial Day trading break on Monday.
His comments also created another supply chain complication for companies that are already worried about the potential hit to the economy from Trump's tariff blitz. Earnings season has seen several companies hold off from providing full annual guidance due to uncertainty around tariffs .
Stocks have suffered this week as deficit worries pushed up Treasury yields, which intensified as Trump's tax bill forged ahead. Wall Street is still weighing the economic impact of Trump's revised bill, which cleared a key hurdle in the House vote for approval.
Fears that the legislation could boost the US deficit by trillions have stoked a surge in longer-dated Treasury yields, which were already in focus after a Moody's downgrade . The 30-year yield ( ^TYX ) eased but held above the key level of 5% on Friday after recently reaching highs not seen since the financial crisis.
Wall Street's attention has also begun to turn to Nvidia ( NVDA ) earnings, due Wednesday after the bell.
This year, the chip giant has found itself in the crosshairs of Trump's fast-moving trade policy as well as debates in Big Tech over costly AI investments. Nevertheless, options traders expect a lower level of volatility in Nvidia's stock after its results next week, compared with recent quarters.
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