Wall Street's major averages were lower on Friday as President Donald Trump slapped a 35% tariff on Canada and warned of further hikes if Ottawa retaliated. Market participants also took a bit of a breather after back-to-back record closes for the benchmark S&P 500 index ( SP500 ). The S&P ( SP500 ) was last -0.4% in midday trade, the tech-heavy Nasdaq Composite ( COMP:IND ) was -0.1% , and the blue-chip Dow Jones ( DJI ) was -0.8% . Trump announced on Thursday a 35% tariff on Canada and warned about further hikes if Ottawa decided to respond. These levies are expected to take effect Aug. 1, according to a letter posted on his Truth Social account. In addition, Trump said he would impose blanket tariffs of 15-20% on other remaining countries. “Stocks are not quite desensitized to tariff headlines just yet. We are still seeing knee-jerk reactions to negative trade headlines. Volatility is an opportunity for investors who are still too exposed to cash,” said Michael Landsberg, CIO at Landsberg Bennett Private Wealth Management. Over in the bond market, the 10-year Treasury yield ( US10Y ) rose 7 basis points to 4.42%, while the 2-year yield ( US2Y ) rose 2 basis points to 3.91%. Meanwhile, Bitcoin ( BTC-USD ) surged to a new all-time high on Friday, fueled by growing institutional interest and supportive signals from the Trump administration. On Friday's economic calendar, the monthly Treasury Statement budget is expected to be in deficit by $50B in June versus $70.9B in June 2024. The focus will shift slightly from tariffs and trade developments to the second quarter U.S. earnings season, which kicks off next week with reports from major banks. "We believe second quarter earnings will be good, but not as good as first quarter. Much of the second quarter was marked with tariff and trade issues, and that may have caused some dislocations in earnings for certain industries as their customers may have been in a holding pattern," said Landsberg. More on markets: Back-To-Back Bulls Crowding Out The Private Sector How I'm Managing My Portfolio In Response To The "Big Beautiful Bill" & Tariff Uncertainty
