Trump’s proposed 50% tariff on the EU from June 1st triggered immediate U.S. stock sell-offs.

S&P 500 futures fell below 5,800 to about 5,750, marking the largest drop since the tariff truce.

Market uncertainty rises with potential EU retaliation, while the 30-year Treasury yield stays above 5%.

In a striking announcement, former U.S. President Donald Trump recommended imposing a “straight 50% tariff on the EU, starting June 1st.” This declaration came after a 90-day tariff pause, signaling a sharp escalation in trade tensions between the U.S. and Europe.

The news immediately rattled U.S. financial markets. On Friday, May 24, stocks declined sharply after Trump’s threat, with the S&P 500 down 0.4% in afternoon trading, poised for its worst weekly performance in seven weeks. The Dow Jones and Nasdaq also fell, reflecting growing investor unease.

S&P 500 Futures Plunge Below 5,800

Following the announcement, S&P 500 futures plunged sharply, dropping below the 5,800 level to around 5,750, according to The Kobeissi Letter. It marked the significant downturn since the 90-day tariff truce began, illustrating heightened anxiety among investors about the new trade risks.

The S&P 500 futures decline is compounded by technical support levels near 5,750–5,800, which have been tested amid recent price volatility. Investors remain cautious as uncertainty lingers over whether tariffs will trigger retaliatory actions from the European Union.

Analysts warn that such an aggressive tariff approach could severely impact key industries, including automotive, agriculture, and luxury goods, by disrupting supply chains and escalating trade tensions. The threat has fueled fears of a prolonged economic standoff affecting both sides of the Atlantic.

Trump’s Tariffs Trigger Market Uncertainty

With June 1st fast approaching, market watchers are focusing on the EU’s potential response. Retaliation could further deepen tensions, influencing global trade policies and financial markets for the foreseeable future.

On Thursday, the S&P 500 fell 0.04%, continuing Wednesday’s steep 1.6% drop. However, futures indicate another 1.6% decline at today’s open, triggered by President Trump’s unexpected tariff announcement targeting Apple and the European Union.

This sharp decline underscores the persistent uncertainty tariff policies create for investors, just as markets were starting to stabilize after a recent rally.

Adding to the strain, the 30-year Treasury yield stays above the crucial 5% level—unseen since the financial crisis—fueled by rising worries about the federal deficit after progress on Trump’s tax bill in the House.

Read More: Bitcoin Crashes 5% Post-$112K ATH as Trump Revives Trade War With EU and Apple

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Filed under: Bitcoin - @ May 24, 2025 5:18 am