Stock Prices Drop Amid Renewed Trade Fears due to Trump's Tariff Threats; Major Indices Report Weekly Dips, May 23, 2025
Stocks end the week lower on Friday, as renewed trade tension concerns emerge following President Donald Trump's remarks on potential 50% tariffs on imports from the European Union. The Dow Jones Industrial Average dropped 0.6%, while the S&P 500 and Nasdaq Composite slid 0.7% and 1% respectively. This comes after a relatively stable market performance earlier in the week, as the federal budget bill moved through Congress.
Earlier in the day, Trump announced on Truth Social that trade discussions with the European Union are not progressing well, and he suggested a 50% tariff on European imports starting from June 1. Additionally, he stated that any iPhone sold in the U.S. must be made domestically, or Apple would face a minimum 25% tariff.
The potential tariffs caused a return of market volatility, which had relatively diminished during the previous few weeks. Coming into this week, stocks had recorded gains in three of the previous four weeks, as Trump appeared to soften his stance on trade and the U.S. paused massive tariffs on leading trade partners, including China. However, the latest comments from Trump have once again brought unpredictability into the trade policy, potentially impacting economic growth and corporate profits. As a result, the Dow and the Nasdaq declined 2.5% this week, while the S&P 500, which is currently on a four-day losing streak, shed 2.6%.
Apple shares fell by 3% on Friday following the threat from Trump, marking the eighth consecutive day of declines and pacing declines for mega-cap technology stocks. Other technology companies, such as Microsoft (MSFT), Nvidia (NVDA), Amazon (AMZN), Alphabet (GOOG), and Meta Platforms (META) each declined more than 1%, while Tesla (TSLA) and Broadcom (AVGO) both fell slightly.
On the positive side, shares of tax and accounting software firm Intuit jumped 8%, leading S&P 500 advancers, after the company posted strong earnings and a rosy outlook. Several other companies also made big moves following the release of quarterly results, with some notable decliners including Deckers Outdoor (DECK), Workday (WDAY), and Ross Stores (ROST).
In other news, Bitcoin was trading at $108,300 in late-afternoon trading after reaching a record high near $112,000 yesterday. The digital currency has reached an all-time high for the first time since January, shortly before President Trump took office. The yield on the 10-year Treasury note declined to 4.51%, moving from 4.55% at yesterday's close. The yield had risen as high as 4.63% on Thursday, marking its highest level in over three months.
The U.S. dollar index, which measures the dollar's performance against a basket of foreign currencies, fell 0.9% to 99.10, trading at its lowest level of the month. Gold futures increased 1.9% to $3,360 an ounce as investors turned to the traditional safe haven asset amid the downturn in equities. West Texas Intermediate futures, the U.S. crude oil benchmark, rose 0.9% to $61.75 per barrel.
Major S&P 500 Movers on Friday
Decliners:
- Deckers Outdoor shares plummeted 20% to lead S&P 500 decliners, as the parent company of Hoka and Ugg footwear brands declined to provide full-year guidance for fiscal 2026, citing uncertainties related to tariffs and trade policy. The company's near-term net sales forecast for the first quarter also came in below consensus estimates.
- Workday shares dropped about 13% as the cloud-based software provider announced a lackluster subscription revenue outlook. Although the company topped sales and profit expectations, Workday predicted softening spending on its human capital management software by its enterprise clients. Analysts have pointed to potential pricing pressure amid stiffening competition in human resources and financial management software.
- Discount retailer Ross Stores also shelved its full-year guidance, citing a lack of visibility on tariffs and their potential business impact. The company's CEO indicated that, while direct imports account for a limited fraction of its merchandise, more than half of the products sold at Ross originate in China, so higher tariffs could hinder profitability. Ross shares plunged 9.8% on Friday.
Advancers:
- Shares of tax and accounting software firm Intuit secured the top daily performance in the S&P 500, surging 8.1% after the company surpassed sales and profit projections for its fiscal third quarter, while increasing its full-year forecasts. Analysts praised the performance, with several firms lifting their price targets on the stock. Intuit could also benefit from the possible elimination of the free IRS direct tax filing system under the budget proposal passed by the House this week.
- Other provisions of the House tax and spending bill currently headed to the Senate include the removal of green energy incentives. The likelihood of less favorable policies hammered shares of renewable energy companies this week, but several industry players managed to stage a partial recovery on Friday. Shares of solar technology firm Enphase Energy bounced 4.3%. Shares of AES Corp., a utility focused on generating power from renewable sources, clawed back 3.7%.
- CrowdStrike shares advanced 2.6% on Friday to reach a record-high close. The cybersecurity firm received recognition for the outperformance of its identity theft protection and response capabilities. Earlier this week, CrowdStrike also announced its integration into enterprise artificial intelligence ecosystems powered by Nvidia (NVDA) Blackwell infrastructure, leveraging CrowdStrike's own AI tools to mitigate the vulnerabilities inherent to AI operations.
US Steel Soars as Trump OKs Nippon Steel 'Partnership'
United States Steel shares jumped 21% on Friday after President Donald Trump announced that the company will partner with Japan's Nippon Steel, seemingly ending a long-running "will-they-won't-they" deal drama. Trump stated that the partnership will create at least 70,000 jobs and add $14 billion dollars to the U.S. economy. U.S. Steel did not immediately respond to Investopedia's request for comment. Shares of Cleveland-Cliffs, which had sought to acquire US Steel instead, fell on the news, finishing the day down about 7%.
S&P 500, Dow Back in Negative Territory for 2022
The major indexes lost ground this week, led by the Dow Jones Industrial Average and S&P 500, which moved back into negative territory for 2022. With their declines this week, the Dow gave up 2.5% and the S&P 500 shed 2.6%, while the Nasdaq Composite, which fell 2.5%, has yet to recover from its negative terrain for 2022. Coming into this week, the Dow and the S&P 500 had nudged back into positive territory for 2022, marking a notable comeback for both. The Dow had been more than 11% below its end-2021 level in early April, while the S&P 500 was down 15% for the year at its low point.
Nuclear Power Stocks Jump on Report of New Trump Support
Shares of nuclear energy companies, including Oklo and NuScale Power, soared on Friday as President Donald Trump signed new executive orders aimed at boosting the industry. The executive orders are meant to speed up approval of new nuclear reactors, and strengthen fuel supply chains, among other changes. The need for AI computing power is expected to skyrocket over the next 5-10 years, and the administration has already taken some steps to encourage nuclear power. This new executive order is expected to be a significant tailwind for the industry. Oklo shares were up 27% to around $51, while NuScale surged 22% to $31.
Why Wedbush is Back Among Street's Top Tesla Bulls
Wedbush analysts on Friday lifted their price target for Tesla stock to one of the Street's highest as they look ahead to the electric vehicle maker's planned June launch of fully autonomous Teslas in Austin, Texas. The analysts, led by Dan Ives, increased their price target to $500 from $350, reclaiming the spot as the most bullish tracked by Visible Alpha. The new price target puts Wedbush analysts closer to the $550 goal they held for Tesla stock before CEO Elon Musk's involvement in the Trump administration fired up what they called a "brand crisis tornado."
Workday Slides as Subscription Revenue Disappoints
Shares of Workday dropped on Friday after the provider of human resources software didn't increase its full-year subscription revenue outlook as it faced an "uncertain environment." The company affirmed its earlier guidance for fiscal 2026 subscription revenue of $8.80 billion, which was in line with Visible Alpha expectations, and raised its non-GAAP operating margin outlook to 28.5% from 28.0%. The news offset strong fiscal 2026 first-quarter results, with Workday posting adjusted earnings per share of $2.23 and revenue rising 13% year-over-year to $2.24 billion. Subscription revenue grew 13% to $2.06 billion. All three exceeded analysts' estimates.
Intuit Soars as Results Show 'Eye-Popping' Strength
Intuit's shares surged on Friday as several analysts lifted their price targets after the tax and accounting software provider reported stronger-than-expected earnings and raised its outlook. The TurboTax parent showed "eye-popping consumer strength," with UBS writing that "after a couple years of stumbling, this year's performance likely lifts sentiment." The company could also benefit from new legislation that would potentially reduce competition, as the House of Representatives voted to advance the "One Big Beautiful Bill," the budget proposal backed by President Trump. The bill would make sweeping changes to the tax code if signed into law, including the elimination of the IRS's Direct File program. The free IRS direct filing system competes with Intuit's TurboTax, which offers both free and paid tax filing software.
Deckers Plunges as Ugg Parent Provides No Full-Year Outlook
Deckers Outdoor shares plummeted on Friday after the Ugg and Hoka parent declined to give a full-year outlook due to uncertainties around tariffs. The company, which makes many of its products in China, estimated first quarter net sales of $890 million to $910 million, which fell below Visible Alpha consensus. Citi analysts stuck with their buy call and $150 price target on the stock, stating that any sell-off provides an especially favorable entry point. Deckers Brands also announced the appointment of Cynthia L. Davis as chair of its board, effective immediately.
- The potential tariffs announced by Trump have caused a return of market volatility, as the Dow Jones Industrial Average dropped 0.6%, while the S&P 500 and Nasdaq Composite slid 0.7% and 1% respectively.
- Coming into this week, stocks had recorded gains in three of the previous four weeks, but the latest comments from Trump have once again brought unpredictability into the trade policy, potentially impacting economic growth and corporate profits.
- Trump announced on Truth Social that trade discussions with the European Union are not progressing well, and he suggested a 50% tariff on European imports starting from June 1, which caused a decline in the Dow and the Nasdaq by 2.5% and 2.6% respectively this week.
- On the positive side, shares of tax and accounting software firm Intuit jumped 8%, leading S&P 500 advancers, after the company posted strong earnings and a rosy outlook.
- Bitcoin was trading at $108,300 in late-afternoon trading after reaching a record high near $112,000 yesterday, marking its first all-time high since January, shortly before President Trump took office.
- The U.S. dollar index, which measures the dollar's performance against a basket of foreign currencies, fell 0.9% to 99.10, trading at its lowest level of the month, while gold futures increased 1.9% to $3,360 an ounce as investors turned to the traditional safe haven asset amid the downturn in equities.
