U.S. Stocks Climb Off Early Lows But Still Close Firmly Negative

(RTTNews) - Stocks moved sharply lower in early trading on Friday but regained some ground over the course of the session. While the major averages climbed well off their worst levels of the day, they still closed firmly in negative territory.

The tech-heavy Nasdaq tumbled as much as 1.7 percent early in the session before ending the day down 188.53 points or 1.0 percent at 18,737.21. The S&P 500 also slid 39.19 points or 0.7 percent to 5,802.82 and the Dow fell 256.02 points or 0.6 percent at 41,603.07.

For the week, the S&P 500 gave up 2.6 percent, while the Nasdaq and the Dow both plunged by 2.5 percent.

The initial slump on Wall Street came after President Donald Trump threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st.

Trump claimed in a post on Truth Social that the EU has "been very difficult to deal with" and said trade talks with the bloc are "going nowhere!"

In a separate Truth Social, Trump also threatened to impose a 25 percent tariff on Apple (AAPL) iPhones that are not manufactured in the U.S. Shares of Apple have tumbled by 2.2 percent following the news.

Trump's threats led to renewed to trade concerns, which had waned considerably in recent weeks after the U.S. reached trade deals with the U.K. and China.

Meanwhile, traders were also looking ahead to earnings news from Nvidia (NVDA), with the AI daring scheduled to release its fiscal first quarter results after the close of trading next Wednesday.

On the U.S. economic front, the Commerce Department released a report showing new home sales in the U.S. in the month of April spiked compared to a significantly downwardly revised level in March.

The report said new home sales soared by 10.9 percent to an annual rate of 743,000 in April after jumping by 2.6 percent to a downwardly revised rate of 670,000 in March.

Economists had expected new home sales to tumble by 4.4 percent to a rate of 692,000 from the 724,000 originally reported for the previous month.

Sector News

Semiconductor stocks turned in some of the market's worst performances on the day, dragging the Philadelphia Semiconductor Index down by 1.5 percent.

Notable weakness was also visible among networking stocks, as reflected by the 1.0 percent loss posted by the NYSE Arca Networking Index.

Retail, computer hardware and software stocks also moved to the downside, while gold stocks moved sharply higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index rose 0.5 percent, while China's Shanghai Composite Index slid by 0.9 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index dipped by 0.2 percent, the German DAX Index slumped by 1.5 percent and the French CAC 40 Index tumbled by 1.7 percent.

In the bond market, treasuries extended the rebound seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.4 basis points to 4.509 percent.

Looking Ahead

Following the long Memorial Day weekend, Nvidia's earnings news is likely to be in focus next week along with any developments on the trade front.

The Federal Reserve's preferred readings on consumer price inflation are also likely to attract attention along with reports on durable goods orders, consumer confidence and pending home sales.