By Heard Editors
What Happened in Markets Today
President Trump renewed trade tensions. Trump on Monday began sending letters to Japan, South Korea and other nations threatening them with the reimposition of tariffs on Aug 1. The pause on so-called reciprocal tariffs had been set to expire Wednesday. Earlier, Trump also threatened an additional levy on countries aligning themselves with the Brics group of emerging economies, which includes China and India.
Trump's threats came as leaders of the Brics nations met in Rio de Janeiro. Over the weekend, the group released a statement voicing "serious concerns about the rise of unilateral tariff and non-tariff measures." Talks between the U.S. and many key trade partners remain in flux. The European Union is aiming for an agreement in principle by Wednesday, when Trump had threatened to raise tariffs for EU imports to 50%.
Stocks fell. The Dow Jones Industrial Average dropped 422 points, or 0.9%. The S&P 500 and Nasdaq Composite also fell 0.8% and 0.9% respectively. The S&P and Nasdaq hit record highs last week ahead of the July Fourth holiday on which Trump's megabill was signed into law.
Tesla shares dropped nearly 7% after Trump ridiculed Elon Musk's new political party. Musk's move Saturday to start the "America Party" marks the billionaire's latest foray into politics after reigniting a feud with President Trump over the megabill that passed last week. For investors, heightened tensions between Musk and Trump are a potential threat to Tesla. Earlier this month, the president raised the prospect he could eliminate contracts and other benefits the government gives to the entrepreneur's companies.
The dollar gained and Treasury yields rose. Ten-year yields settled at 4.394%. The euro and the Japanese yen weakened.
This analysis comes from the Journal's Heard on the Street team. Subscribe to their free daily afternoon newsletter here.
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(END) Dow Jones Newswires
July 07, 2025 16:52 ET (20:52 GMT)
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