The trading day began on a sour note—or a strong one, depending on your stance on tariffs—after former President Trump announced via social media that he would impose a 25% tariff on Apple products not manufactured in the U.S. The market responded swiftly: Apple shares declined for a seventh straight session, falling from a peak of $213.94 on May 14 to $195.27 today, a drop of -8.73%.

Trump didn’t stop there. In a follow-up post, he proposed a flat 50% tariff on the European Union, set to begin June 1. Later in the day, he reaffirmed his position, stating, “I’m not looking for a deal with the EU. It’s set at 50%.” The message is clear—Trump remains steadfast on tariffs, whether targeting foreign nations or U.S.-based companies.

If the EU retaliates, additional escalation could be on the horizon. This mirrors the pattern seen with China, where tariffs peaked at 145% before being temporarily reduced to 30% as of May 12, under a 90-day negotiation window. That clock is now ticking.

Markets opened lower on the news. Although equities recovered somewhat intraday, they faded back toward the middle of the day’s range by the close.

📉 Closing Numbers – May 23, 2025

Dow Jones: -256.02 pts (-0.61%) at 41,603.07
S&P 500: -39.29 pts (-0.67%) at 5,802.82
Nasdaq Composite: -188.53 pts (-1.00%) at 18,737.21

📉 Weekly Performance

Dow: -2.47%
S&P 500: -2.61%
Nasdaq: -2.47%

US yield started the day lower and although ending the day lower, the US session saw some debt selling (yields moved higher). The final values near the end of week sees:”

2 year yield 3.993%, -0.6 basis points
5-year yield 4.077%, -2.5 basis points
10-year yield 4.509%, -4.4 basis points
30-year yield 5.031%, -3.3 basis points.

For the trading week, the yield curve is steep and with a

2-year yield unchanged
10 year yield is up 6.4 basis points

The 30 year yield rose sharply by 12.7 basis points (on it’s way back above 5.0%.

That policymakers speaking today gave a cautionary tone:

Chicago Fed Pres. Austan Goolsbee, speaking on CNBC, emphasized that businesses are seeking consistency in policy amidst the uncertainty created by rapidly changing tariffs—particularly pointing to the proposed 50% EU tariff as a disruptive and alarming development for supply chains. He noted growing anxiety among firms about inflationary pressures stemming from ongoing tariff announcements and warned that such moves could have stagflationary consequences—the worst-case scenario for a central bank. Goolsbee stressed the importance of waiting for clearer data before acting, acknowledging that the effects of current policies may already be in motion but not yet visible in economic reports. While he still believes the U.S. economy is fundamentally strong, he indicated that his previous forecast for rate cuts by year-end may now be delayed by up to 16 months due to heightened uncertainty.
St. Louis Fed Pres.Musalem warned that the Fed is closely monitoring signs that short-term inflation expectations could seep into long-term outlooks, a dynamic they are keen to avoid. He noted that businesses are already expecting higher input and output prices and are struggling to manage growing uncertainty. While GDP is currently close to its potential, inflation remains above target. Musalem also emphasized that the current environment is markedly different from the pandemic era, adding that the probability of a near-term Fed rate cut is low—estimated at just one in five.
Finally, Kansas City Federal Reserve Pres. Jeffrey Schmid emphasized that current uncertainty is largely being driven by ongoing tariff discussions. He stated that the Fed will place greater weight on hard data rather than forecasts when making interest rate decisions, cautioning against overreliance on soft data. Schmid also highlighted the need for the Fed to carefully consider its future use of the balance sheet. He acknowledged that markets have already priced in 83 basis points of rate cuts over the coming year.

The Fed – like businesses – are struggling with the uncertainty from the Trump administration and their policy actions.

The US dollar would lower versus all the major currency pairs with the biggest mover being against the NZD /1.44%) and the AUDUSD (-1.31%).

The greenback also fell close to 1% versus the JPY (-1.0%), CHF (-0.93%), and the CAD (-0.93%).

For the trading week, the dollar was weaker vs all the major currencies as well::

EUR: -1.81%
JPY, -2.13%
GBP, -1.99%
CHF -1.93%
CAD -1.69%
AUD, -1.47%
NZD, -1.82%

Looking at other markets:

Crude oil fell modestly this week by -0.29%
Gold rose by 4.82% with its largest weekly gain since April 7
Bitcoin rose from $106,520 to $108,234

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