Trump Accuses China Of Violating Trade Deal, Sending Futures Lower

The major U.S. index futures are currently pointing to a lower open for the markets on Friday, with stocks likely to give back ground after ending yesterday’s choppy session moderately higher.

The futures came under pressure after President Donald Trump accused China of violating the trade agreement reached earlier this month.

Trump said in a post on Truth Social that “everything quickly stabilized and China got back to business as usual” following the trade deal.

“Everybody was happy! That is the good news!!!” Trump said. “The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”

Trump’s claim comes after Treasury Secretary Bessent said in a Fox News interview on Thursday that U.S.-China trade talks “are a bit stalled.”

In U.S. economic news, a closely watched report release by the Commerce Department showed consumer prices in the U.S. crept slightly higher in the month of April.

After failing to sustain a strong move to the upside early in the session, stocks fluctuated over the course of the trading day on Thursday.

The major averages bounced back and forth across the unchanged line before eventually closing moderately higher.

The Dow rose 117.03 points or 0.3 percent to 42,215.73, the Nasdaq climbed 74.93 points or 0.4 percent to 19,175.87 and the S&P 500 increased 23.62 points or 0.4 percent to 5,912.17.

Early buying interest was generated in reaction to news that a federal court blocked Trump’s “reciprocal tariffs” on imports from U.S. trade partners from going into effect.

The Court Of International Trade ruled Trump overstepped his authority to impose the tariffs by invoking emergency economic powers.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the three-judge panel wrote.

The judges also said tariffs on Canada, Mexico and China related to drug trafficking “fail because they do not deal with the threats set forth in those orders.”

The Trump administration immediately appealed the decision, with an appeals court temporarily pausing the lower court’s ruling later in the day.

A positive reaction to earnings news from Nvidia (NVDA) also contributed to initial strength on Wall Street, with the AI darling jumping by 3.2 percent on the day.

The jump by shares of Nvidia came after the company reported fiscal first quarter results that exceeded analyst estimates on both the top and bottom lines.

Buying interest waned over the course of the session, however, as lingering uncertainty about trade continued to hang over the markets.

Reflecting the relatively lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day.

Biotechnology stocks showed a strong move to the upside, however, with the NYSE Arca Biotechnology Index climbing by 1.2 percent.

Oil producer, healthcare and commercial real estate stocks also saw some strength, while computer hardware and networking stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are falling $0.48 to $60.46 a barrel after slumping $0.90 to $60.94 barrel on Thursday. Meanwhile, after climbing $22.20 to $3,317.10 an ounce in the previous session, gold futures are slipping $15.60 to $3,301.50 an ounce.

On the currency front, the U.S. dollar is trading at 143.60 yen versus the 144.21 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1355 compared to yesterday’s $1.1370.

Asia

Asian stocks ended mostly lower on Friday due to uncertainty surrounding a court battle about U.S. President Donald Trump’s tariffs and rising concerns about U.S. economic stability.

Gold headed for a weekly loss in Asian trading as the dollar ticked higher ahead of a key U.S. inflation reading that may provide further insight into the Federal Reserve’s policy trajectory.

Oil prices were set for a second weekly decline, weighed down by expectations of another OPEC+ output hike in July.

China’s Shanghai Composite Index dropped 0.5 percent to 3,347.49, with Apple suppliers leading losses after U.S. Treasury Secretary Scott Bessent said U.S.-China trade talks are “a bit stalled” and getting a deal over the finish line may need the direct involvement of President Donald Trump and Chinese President Xi Jinping.

Hong Kong’s Hang Seng Index slumped 1.2 percent to 23,289.77. Tech stocks like Alibaba and Baidu dropped around 4 percent after the suspension of U.S. chip software exports to China. Li Auto rallied 3.8 percent after reporting better-than-expected Q1 earnings.

Japanese markets lost ground as the yen extended gains against a basket of rivals after the release of hot Tokyo inflation data, which boosted the odds of a rate hike in June.

Investors also digested other important data on factory output, retail sales and unemployment. The Nikkei 225 Index tumbled 1.2 percent to 37,965.10, while the broader Topix Index settled 0.4 percent lower at 2,801.57.

Seoul stocks fell sharply on profit taking after rising to a 10-month high in the previous session, driven by gains in tech shares.

The Kospi ended down 0.8 percent at 2,697.67 amid U.S. tariff concerns and the release of soft industrial production, retail sales and facilities investment figures for April.

Australian markets eked out modest gains despite data showing an unexpected contraction in April retail sales.

The benchmark S&P/ASX 200 Index edged up by 0.3 percent to 8,434.70 as investors took refuge in defensive sectors such as banks and healthcare. The broader All Ordinaries Index closed 0.3 percent higher at 8,660.30.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rallied 1.1 percent to 12,418.89 on the back of declining bond yields.

Europe

European stocks have moved mostly higher on Friday despite the latest U.S. court rulings on President Trump’s “Liberation Day” tariffs adding another layer of uncertainty.

“We are already negotiating in [a] quite uncertain environment, with things changing quite rapidly,” Valdis Dombrovskis, European Union commissioner for economy, told CNBC’s Karen Tso.

He described the tariff situation as “urgent,” and reiterated that the EU was committed to agreeing to a negotiated deal with the U.S.

Meanwhile, investors shrugged off data from Destatis showing that German retail sales decreased 1.1 percent on a monthly basis in April, in contrast to the 0.9 percent rise in March. Sales were expected to grow 0.3 percent.

Year-on-year, retail sales growth softened to 2.3 percent from 3.3 percent a month ago.

Elsewhere, Spanish inflation fell below the European Central Bank’s 2 percent target in May and inflation data from a slew of German states signaled weakening inflationary pressures, raising the odds of another interest rate cut by the European Central Bank when it next meets on June 5.

The German DAX Index is up by 0.6 percent, the U.K.’s FTSE 100 Index is up by 0.4 percent and the French CAC 40 Index is just above the unchanged line.

Drax Group has jumped. The renewable energy company has announced the lapse of its cash offer for the entire issued share capital of HEIT.

Sirius Real Estate has also shown a notable move to the upside after selling its Pfungstadt park for €30 million.

Meanwhile, pharmaceutical firm Sanofi SA has tumbled after reporting mixed results from two phase 3 trials of its investigational chronic obstructive pulmonary disease (COPD) treatment, Itepekimab.

U.S. Economic News

Consumer prices in the U.S. crept slightly higher in the month of April, according to a closely watched report released by the Commerce Department on Friday.

The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in April after coming in unchanged in March. The uptick matched economist estimates.

The report also said the annual rate of growth by the PCE price index slowed to 2.1 percent in April from 2.3 percent in March. Economists had expected growth to slow to 2.2 percent.

Excluding prices for food and energy, the core PCE price index still crept up by 0.1 percent in April following a revised 0.1 percent uptick in March. The modest increase came in line with expectations.

The annual rate of growth by the core PCE price index slowed to 2.5 percent in April from 2.7 percent in March, matching economist estimates.

The Federal Reserve’s preferred readings on consumer price inflation were included in the Commerce Department’s report on personal income and spending.

The Commerce Department said personal income increased by 0.8 percent in April after climbing by 0.7 percent in March, while personal spending rose by 0.2 percent in April after rising by 0.7 percent in March.

At 9:45 am ET, MNI Indicators is due to release its report on Chicago-area business activity in the month of May. The Chicago business barometer is expected to inch up to 45.0 in May from 44.6 in April, but a reading below 50 would still indicate contraction.

The University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of May at 10 am ET. The consumer sentiment index for May is expected to be upwardly revised to 51.0 from 50.8.

At 12:20 pm ET, Atlanta Federal Reserve President Raphael Bostic is due to deliver welcome remarks before the Council for Economic Education’s 2025 National Economics Challenge.

San Francisco Federal Reserve President Mary Daly is scheduled to participate in a panel before the Reagan National Economic Forum at 4:45 pm ET.

At 7:30 pm ET, Chicago Federal Reserve President Austan Goolsbee is due to participate in a moderated Q&A before “The Interview Show with Mark Bazer.”