Zürcher Nachrichten - Stock markets fall as Trump threatens tariffs on EU, Apple

Wall Street's main indexes were all down around one percent two hours into trading, with the tech-heavy Nasdaq at one stage losing 1.5 percent before rallying while Apple shares sank 2.5 percent.

Paris and Frankfurt ended with losses of around 1.5 percent, paring slightly earlier losses, with shares in luxury and car companies taking a hit after Trump suggested he would hit the EU with 50-percent tariffs.

London's FTSE 100, which initially rose, also ended in the red.

Germany's DAX had also been higher earlier in the day as German economic growth data was revised up.

"What is somewhat of a surprise is the fact that the EU will now face a considerably higher tariff rate than China, an almost unthinkable scenario just a matter of weeks ago," said Lindsay James, investment strategist at Quilter.

"It is highlighting that much of this policy is designed to be punitive, rather than having any economic credibility to it."

Oil prices rebounded, meanwhile, having earlier dropped by around one percent, while the dollar remained under pressure.

Trump's new threats revived investor concerns about his trade policies after a recent deal with Britain and a tariffs truce with China.

"All the optimism over trade deals wiped out in minutes –- seconds, even," said Fawad Razaqzada, market analyst at StoneX.

Trump said on his Truth Social platform that he was "recommending a straight 50% Tariff on the European Union" from June 1 as "discussions with them are going nowhere!"

"The EU is one of Trump's least favourite regions, and he does not seem to have good relations with its leaders, which increases the chance of a prolonged trade war between the two," said Kathleen Brooks, research director at trading platform XTB.

The US president had announced 20-percent tariffs on EU goods last month but suspended the measure to give space for negotiations.

Trump, however, maintained a 10-percent levy on imports from the 27-nation bloc and nearly every other nation around the world, along with 25-percent duties on the car, steel and aluminium industries.

He also threatened on Friday to hit Apple with a 25-percent tariff if its iPhones are not manufactured in the United States.

"Trump's attack on Apple looks like one of his negotiating tactics to us," Brooks said, noting that the threat comes as his tax-cut plan faces Senate debate after passing the lower house of Congress.

Trump's social media outburst rocked stock markets which had steadied following losses over concerns about the ballooning US debt and rising US borrowing costs.

Investors were already on edge after Moody's stripped the United States of its top-tier credit rating and the House of Representatives approved Trump's tax cut plan, which critics say would add to the country's debt pile.

The yield -- or borrowing cost -- on 10-year and 30-year US government bonds surged this week as investors worried about the fiscal health of the world's biggest economy.

The yields eased late Thursday.

Trump's tax package, which now goes to the Senate, had faced scepticism from fiscal hawks who fear the country is headed for bankruptcy.

Independent analysts warn it would increase the deficit by as much as $4 trillion over a decade, although the White House insists it will spur growth of up to 5.2 percent, projections well outside the mainstream consensus.

- Key figures at around 1545 GMT -

New York - Dow: DOWN 1.0 percent at 41,600.26 points

New York - S&P 500: DOWN 0.7 percent at 5,801.69

New York - Nasdaq Composite: DOWN 1.0 percent at 18,745.66

London - FTSE 100: DOWN 0.4 percent at 8,717.97 (close)

Paris - CAC 40: DOWN 1.7 percent at 7,734.40 (close)

Frankfurt - DAX: DOWN 1.5 percent at 23,612.46 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 37,160.47 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 23,601.26 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,348.37 (close)

Euro/dollar: UP at $1.1333 from $1.1281 on Thursday

Pound/dollar: UP at $1.3498 from $1.3419

Dollar/yen: DOWN at 142.77 yen from 143.99 yen

Euro/pound: DOWN at 83.98 pence from 84.07 pence

Brent North Sea Crude: UP 0.5 percent at $64.76 per barrel

West Texas Intermediate: UP 0.6 percent at $61.60 per barrel

I.Widmer--NZN