MARKET WRAP

Things kicked off this morning with some fiery tweets threatening steep tariffs — 50% on EU goods and 25% on Apple products. The opening gap lower found buyers but much like yesterday the close wasn’t great, giving traders something to think about over the long weekend. On the day, SPX -0.7%, QQQ - 0.9% and IWM -0.3%. The 10Y yield was volatile today but ultimately closed lower, now 4.51%. The dollar was lower with DXY now $99.12. Gold was higher, as was Oil.

After hours: the late day selling carried over a little after hours, with SPY, QQQ and IWM all a tad lower.

• RiskReversal Pod: Dan is joined by Mike Wilson of Morgan Stanley to talk market volatility, the future of trade, tariffs, and taxes. Plus AI and market dynamics, the complexities of the bond market, global debt issue, and the potential impact of Japanese yields.

MRKT MATRIX: TODAY’S TOP STORIES

• Stocks fall Friday after Trump threatens new tariffs against the EU and Apple (CNBC)

• Bessent Sees ‘Several Large’ Trade Deals in Next Few Weeks (Bloomberg)

• The Bar for Near-Term Rate Cut Is ‘A Little Higher,’ Fed’s Goolsbee Says (Bloomberg)

• Bitcoin Options Show Bulls Unbowed With Open Interest at Record (Bloomberg)

• Big Banks Explore Venturing Into Crypto World Together With Joint Stablecoin (WSJ)

• Few S&P 500 Companies Have Withdrawn EPS Guidance For 2025 (FactSet)

WHAT’S NEXT?

Friday morning gave us a reminder that tariff headline risk is still very real. Today’s tweets were enough to shake up global markets, sending European stocks lower and dragging U.S. equity futures down. Up until that point, the day had looked like it would be relatively quiet. But things can escalate fast.

As far as the week that just was, we had five straight gap-down opens. In most cases buyers showed up to cushion the blow. Today was a good example — the S&P 500 hit its low right at the open and then immediately stabilized. Despite that, the SPX was still down -2.6% on the week.

Zooming out though we’re still up over 20% from early April lows and just 5% below all-time highs. That’s in an environment of rising Treasury yields and a falling dollar — two trends the market probably can’t completey ignore much longer. Also worth noting this week: The VIX may have bottomed for now.

Looking ahead, all eyes will be on Nvidia’s earnings next Wednesday. But today’s events serve as a reminder that trade war headlines are still a major wildcard. With the 90-day trade truce set to expire in just over a month, we could be in the early phase of more headline-driven volatility — not less.

We’ll be back Monday with a look at what’s on deck for next week.

TODAY’S EPISODES

Watch RiskReversal Podcast’s newest episode: Morgan Stanley's Mike Wilson on Volatility, Policy Shocks & The Real Tariff Endgame

Mike shares insights from his midyear outlook, predicting a constructive back half of the year despite anticipated volatility. The conversation also touches on the implications of supply constraints, the private economy, and the role of AI in market dynamics. They delve into the complexities of the bond market, the global debt issue, and the potential impact of Japanese yields on US markets. The episode provides a deep dive into the interconnectedness of global financial markets and the strategies investors might consider in navigating the current economic landscape.

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