Traders work on the floor of the New York Stock Exchange (NYSE) on July 07, 2025, in New York City.
Spencer Platt | Getty Images News | Getty Images
Stock futures fell Friday after U.S. President Donald Trump announced a 35% tariff on Canada starting Aug. 1.
Dow Jones Industrial Average futures shed 305 points, or 0.7%. Futures tied to the benchmark S&P 500 declined 0.6%. Nasdaq 100 futures also slid 0.6%.
Trump cited fentanyl as a reason for the duties, adding that they would go higher if Canada retaliates. “If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump said in a letter posted on Truth Social.
This comes as investors continued piling into risk assets, sending the S&P 500 and Nasdaq Composite to new closing records. The broad market S&P gained 0.3% on Thursday, while the tech-focused Nasdaq finished higher by 0.1% as investors shrugged off any worries around the latest trade developments, including a 50% U.S. tariff on imported copper as well as a 50% tariff on Brazil.
The economy needs to continue to stay resilient, however, for the rally to be sustainable, warned Drew Pettit, Citi’s U.S. equity strategy director.
“Structurally, we’re not there yet. Fundamentally, I don’t think we’re there yet,” he told CNBC’s “Closing Bell Overtime” Thursday. “If you want these types of sectors to continue to outperform more than just a tactical trade, you’re going to need the macro data to hold in there and the Fed to cut rates. It’s not an either or, structurally, I think it’s both and we’re not quite there.”
The major averages are on pace to end the week little changed, with the Dow hovering just under the flat line on a weekly basis and the S&P and Nasdaq higher by less than 1%.
