Investors were forced to reassess risk sharply last week as Donald Trump’s aggressive new trade rhetoric rattled global markets and sent shockwaves through major US indices. The prospect of swingeing tariffs on EU imports and a direct tax threat to Apple’s overseas manufacturing sent tech stocks into a tailspin, while renewed fiscal concerns and a weak Treasury auction deepened the market’s malaise.
The week’s rally unravelled swiftly after President Trump took to Truth Social on Friday with a warning that the United States would slap a 50% tariff on all European Union imports unless trade talks accelerated. Apple, a long-time target of the president’s ire over offshore manufacturing, was also singled out for a potential 25% import tax on all iPhones produced outside the US. Shares in the tech giant slumped more than 3% on the day, capping a punishing 8% weekly loss and dragging the broader indices down with it. The Nasdaq and S&P 500 retreated 2.5% and 2.7% respectively over the five-day period.
Markets clawed back some composure on Monday after Trump backed away from his threats, citing a “very nice” phone conversation with European Commission President Ursula von der Leyen. Nevertheless, investors remain on edge as the July 9 trade agreement deadline looms. With the White House seeking to close a $230 billion trade gap with the EU, geopolitical risk is once again a central theme for global portfolios.
Adding to investor unease was a sharp move higher in long-term US bond yields. The US Treasury’s $16 billion auction of 20-year bonds on Wednesday priced at 5%—the highest yield for this tenor since 2020. Weak demand meant primary dealers were left holding nearly 17% of the issuance, a sign of fading investor confidence in the sustainability of US fiscal policy. Concerns have intensified as the “One Big Beautiful Bill Act,” which enshrines Trump’s tax cuts from his first term, passed the House and now heads to the Senate. With estimates showing it could add \$3.8 trillion to the national debt over the next decade, markets are beginning to price in a heavier long-term debt burden.
In the corporate sphere, EasyJet delivered a mixed update, with shares down 3% after the carrier reported a £394 million loss for the October to March winter period. Even with passenger numbers rising 8% year-on-year to 39.5 million, the seasonally weak period—exacerbated by a late Easter—dragged results. Supply-side pressures also resurfaced, as the airline warned of delivery delays for new aircraft from Airbus. However, the outlook remains robust. CEO Kenton Jarvis reaffirmed full-year profit guidance of £700 million, citing resilient travel demand and strong bookings, with 80% of seats for the current quarter already sold.
Tech investors were also rattled by signs of mounting pressure on Apple’s competitive moat. In a bold move, OpenAI confirmed a $6.4 billion acquisition of Jony Ive’s startup io, setting in motion plans to redefine the human-device interface. Altman’s declaration that Ive will design products for the artificial general intelligence era marked a potent symbol of disruption. Tellingly, a senior Apple executive recently admitted that “you may not need an iPhone 10 years from now.” This acknowledgment, coupled with external competitive threats, hints at potential challenges ahead for Apple’s long-term growth story.
Elsewhere, UK economic data revived inflation concerns, with consumer prices rising at their fastest annual pace in over a year. CPI hit 3.5% in April, up from 3.2%, led by higher energy bills, travel costs and vehicle taxes. Services inflation surged to 5.4%, placing fresh pressure on the Bank of England. Money markets are now pricing in a more cautious path for rate cuts this year, expecting just one or two additional 0.25% moves.
Safe-haven assets benefitted from the uncertainty. Gold and silver prices climbed 3.5% on the week as traders sought protection from inflation, debt concerns and geopolitical risk. Oil, by contrast, edged lower to \$64 a barrel amid reports that OPEC+ is considering increasing production more aggressively from July, potentially restoring some slack to global supply chains.
Amid the volatility, investors are being reminded of the fragile balance between growth, politics, and monetary policy. Each of these forces continues to shape sentiment heading into the summer.
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