S&P 500 Forecast SPX falls as Trump hits Canada with tariffs

US futures                                         

Dow futures -0.69% at 44335

S&P futures -0.47% at 6250

Nasdaq futures -0.3% at 22757

In Europe

FTSE -0.54% at 8923

DAX -0.94% at 24245

• US stocks fall away from record highs
• Trump announced 35% tariff on Canada
• Trump also considers a 15%-20% universal tariff
• Oil rises despite tariff developments

Trump hits Canada with a 35% tariff

US futures are pointing to a weaker open, pulling back from yesterday's record highs after Trump's latest trade tariff announcements, hitting Canada.

Trump announced a 35% tariff on Canada up from the 25% that he had imposed in March and warned that this could rise further if Canada retaliates. Trump also said he's considering lifting the universal tariff rate from the current baseline rate of 10% to 15% or 20%. These latest announcements come after a week full of trade tariff developments, including a 50% tariff on copper.

Despite this barrage of trade tariffs, some of which are considerably higher than Liberation Day announcements, U.S. stocks have shown remarkable resilience and have been relatively subdued, with perhaps Nvidia becoming the first company to reach the $4 trillion valuation milestone being the only major highlight.

The S&P 500 and the Nasdaq are on track to end the week largely flat, whilst the Dow looks set to snap a three-week winning streak.

Attention will be turning to next week's inflation data as well as the start of earnings season for further clues on how Trump's tariffs could be impacting the US economy and corporate America.

Corporate news

NVIDIA ended trading on Thursday with a market value of over $4 trillion for the first time, cementing the AI chipmaker's status as the world's most valuable company. The share price is now up 89% from its lows in April. The record market capitalization comes amid continued and strong demand for AI technologies..

Coinbase Strategy and other crypto-related stocks are rising firmly. Bitcoin reached a fresh all-time high on Friday, above $ 118,000. Strong BTC ETF inflows and institutional demand come ahead of crypto week next week, which may see increased regulatory clarity.

BP ADR's are set to open higher after the energy giant said that Q2 results from its oil trading division should be strong, and they expect higher upstream production buoyed by US operations. However, lower oil and gas prices would affect its performance; low oil sales and gas sales could hurt earnings by as much as $800 million.

S&P 500 forecast – technical analysis

The S&P 500 has broken out of the rising channel and reached a record high of 6290 before easing lower. Support can be seen at 6225, the rising support trendline. Below here, 6200 and 6150 come into play. Buyers will look to rise above 6290 to reach fresh record highs.

FX markets – USD rises, GBP/USD falls

The USD is edging higher and is set for a weekly rise as it continues its recovery from a 3.5-year low, and as investors digest the latest trade tariff developments. Trade tariffs are expected to be inflationary, so they are supporting the USD higher.

The EUR/USD is unchanged at 1.17 as the market reacts to Trump's threats of a 15% universal tariff, and as the EU awaits news of a potential US-EU trade framework deal.

GBP/USD is falling to a two-week low after UK GDP came in weaker than expected. The economy unexpectedly contracted in May by 0.1% month on month, defying expectations of 0.1% growth. This marked a second straight month of contraction. The news will not be welcomed by the chancellor, who's counting on economic growth to fill a black hole in public finances.

Oil rises amid a tighter market

Oil prices are rising on Friday after losses earlier in the week, as investors continue to assess the impact of Trump's trade tariffs against a tight market.

While tariffs are expected to dampen growth in the US, which could be negative for the demand outlook, the IEA said that the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation.

People are shying away or unwilling to travel on roads or in the air, helping to underpin demand despite the uncertainty surrounding the Trump tariff.

I mean, in other positive signs for oil demand, Saudi Arabia shipped about 50 million barrels of crude oil in August to China, marking the largest such shipment in over 2 years.

However, OPEC+ is set to continue to increase supply at least over the short term, which may limit the upside.