Key Points
- Global stocks fell on Friday as investors grew worried about U.S. trade policy and a new spending bill.
- The main concern is the July 9 deadline for countries to secure trade deals before new U.S. tariffs are imposed.
- President Trump’s newly passed spending bill is expected to add $3.4 trillion to the national debt, which will weaken the U.S. dollar.
- The negative sentiment came despite a strong U.S. jobs report the previous day.
Global stocks slipped on Friday as investors grew nervous about an approaching U.S. trade deadline and the long-term impact of President Donald Trump’s massive new spending bill. With U.S. markets closed for the Independence Day holiday, the focus shifted to Europe and Asia, where uncertainty weighed on sentiment.
The primary concern is the July 9 deadline for countries to secure new trade deals with the United States. President Trump indicated that his administration would soon start sending letters to countries detailing the new tariff rates they will face, a sign that sweeping trade deals are unlikely. This shift has rattled export-reliant economies, including those of Japan and South Korea.
Adding to the unease is Trump’s signature tax and spending bill, which narrowly passed the House.
While it avoids a government default, the bill is expected to add a massive $3.4 trillion to the national debt to fund military and border security spending. This has put pressure on the U.S. dollar, which has fallen against other major currencies.
The gloomy mood on Friday followed a surprisingly strong U.S. jobs report from the day before, which had briefly sent Wall Street to a new record high. This suggests that while the U.S. economy is holding up, investors are now more focused on the risks posed by trade conflicts and rising national debt. In this environment, safe-haven assets like gold saw their prices rise as investors looked for security.
