A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell on May 19, 2025, in New York City.
Timothy A. Clary | Afp | Getty Images
Stock futures fell Friday morning, to close out a big winning month, after President Donald Trump said China violated its preliminary trade agreement, reigniting fears that the U.S. could enter a drawn out a trade war.
Futures tied to the Dow Jones Industrial Average lost 174 points, or 0.4%. S&P 500 futures and Nasdaq-100 futures each slid 0.6%.
Futures took a leg down on Friday morning after Trump claimed in a social media post that China “violated” its current trade agreement with the U.S. That comes after Treasury Secretary Bessent said in a Fox News interview that U.S.-China trade talks “are a bit stalled.”
The administration has found its contentious plan for broad and steep levies in legal limbo. Investors are now wondering if, or when, a long-term agreement between China and the U.S. can be reached.
Legal concerns hit a boiling point after the Court of International Trade on Wednesday night halted the majority of Trump’s tariffs. But an appeals court granted a stay on Thursday afternoon, allowing the duties to remain in place until next week.
The Trump administration considered using a provision of the Trade Act of 1974 to implement tariffs of up to 15% for 150 days, according to The Wall Street Journal.
The legal battle around tariffs is the latest dose of uncertainty for what was an already uneasy market. Investors have contended with macroeconomic concerns tied to tariffs and worry that the shakeup to U.S. trade policy could cause a recession.
Yet stocks are on the verge of closing out May with strong gains following a rocky April. A chunk of the gains followed a trade deal announcement between the U.S. and United Kingdom early in the month, which investors hoped could pave for the way for more agreements with countries facing duties.
The S&P 500 has added more than 6% this month, while the Nasdaq Composite has surged 10% in that time. The 30-stock Dow has gained about 4% on the month.
“I think as we head into summer that momentum can continue, [but] then that’s where the hard data that may catch up to the weaker, soft data, could come into play,” Ned Davis Research chief U.S. strategist Ed Clissold told CNBC’s “Closing Bell” on Thursday. “I think as we move through the second quarter into the third quarter, there’s still some good momentum in the market.”
For the week, the S&P 500 has advanced about 2%, while the 30-stock Dow is up 1.4%. The tech-heavy Nasdaq has advanced 2.3%.
Investors also monitored the personal consumption expenditures price index released on Friday. The index, which is considered a favorite by the Federal Reserve, came in lower than economists expected at 2.1% for April on an annualized basis.