Global stocks slumped Friday as President Donald Trump’s sweeping new import tariffs deepened concerns over global growth and inflation. S&P 500 futures fell more than 1%, signaling a fourth day of declines. Amazon.com Inc. tumbled up to 8% in premarket trading after underwhelming earnings, injecting caution into an otherwise upbeat Big Tech reporting season. The dollar and Treasury yields climbed after Trump blasted the Federal Reserve on social media, urging its board to “assume control” if Chair Jerome Powell fails to cut rates. Investors are also bracing for July’s US jobs report, expected later today. Trump’s plan imposes a 10% global minimum tariff and 15% or higher duties on trade-surplus nations, escalating his bid to rewrite global commerce. The measures have begun to overshadow the AI-driven optimism that had buoyed megacap stocks. “Next week marks a pivotal shift for global trade,” said Kim Heuacker, associate consultant at Camarco. “High US stock valuations are becoming increasingly tough to justify.” Europe’s Stoxx 600 dropped over 1% to a one-month low, led lower by pharma names like Novo Nordisk, GSK and AstraZeneca after Trump demanded drugmakers cut US prices. The MSCI All Country World Index declined for a sixth session — its longest losing streak since September 2023. “The tariffs are really bad for Europe,” warned Ludovic Subran, chief investment officer at Allianz SE. “The cost for companies will be huge, as the US is their biggest market by far.” Most baseline tariffs remain at 10%, but Trump’s move to hike duties on some Canadian goods to 35% risks straining relations further. Bloomberg Economics estimates the average US tariff will jump to 15.2% under the plan — up from 13.3% now and far above the 2.3% level before Trump returned to office. Bloomberg strategists caution that seasonal weakness, muted earnings, and a strong euro leave European stocks vulnerable: “Tariffs and soft growth remain major headwinds into year-end,” said Nour Al Ali of Macro Markets & Squawk. Attention now turns to July’s payrolls report, forecast to show moderating hiring and unemployment ticking up to 4.2%. “With so much uncertainty, it’s natural for traders to take profits ahead of nonfarm payrolls,” said Gareth Nicholson, CIO of Nomura International Wealth Management.

S&P 500 and Nasdaq futures jumped Thursday, pointing to fresh record highs after blowout earnings from Meta (META) and Microsoft (MSFT) reignited optimism over Big Tech’s AI spending spree. Nasdaq 100 futures (NQ=F) rose about 1.3%, while S&P 500 contracts (ES=F) gained nearly 1%. Dow Jones Industrial Average futures (YM=F) trailed with a 0.3% rise. Meta surged 12% premarket after topping earnings forecasts and raising guidance, while Microsoft jumped over 8%, moving closer to a $4 trillion valuation. Investors are now awaiting results from Apple (AAPL) and Amazon (AMZN) after the close for the next catalyst. On the macro front, the focus shifts to the Fed’s preferred inflation gauge — the PCE index — after the central bank left rates unchanged for a fifth straight meeting Wednesday. Chair Jerome Powell stressed “no decisions” had been made about a September cut, pushing back against President Trump’s claims one was imminent. Market odds of a September cut slid below 40% from 60% before the meeting, CME data shows. Meanwhile, a new trade deal with South Korea eased tariff tensions ahead of Friday’s deadline. The agreement imposes a 15% tariff on South Korean imports, eliminates duties on U.S. exports, and includes a $350 billion investment pledge along with increased U.S. energy purchases.

Franklin Templeton’s Sonal Desai: Fixed Income Should Deliver “Boring Returns” The S&P 500 has bounced back with an 8% gain this year, while bonds are enjoying renewed attention amid yields above 4% — the best in two decades, according to BlackRock. But Sonal Desai, CIO of Franklin Templeton Fixed Income, warns investors not to expect stock-like gains from bonds. Speaking with Ritholtz Wealth Management’s Barry Ritholtz, Desai described her stance bas “aggressively neutral.” With 10-year Treasury yields hovering around 4.4%–4.5%, she sees fair value closer to 4.75%–5%, suggesting more potential downside than upside. Desai isn’t forecasting a recession yet, citing resilient consumer spending despite tariffs, but she cautions that excess market liquidity is pushing investors into riskier bets. “Don’t get over your skis,” she says, warning against loading up on risk when markets are priced for perfection. Her strategy: favor shorter maturities — even ultrashort bonds — to limit exposure if yields rise. As opportunities appear, gradually move further out on the yield curve. Desai also flags a longer-term issue: the U.S. fiscal deficit. Without meaningful policy shifts to reduce it, growth could suffer. “Fixed income should be the ballast in your portfolio,” Desai concludes. “You want boring returns — that’s the point.”

The S&P 500 is on track for its 15th record close of 2025, with futures climbing Monday as investors welcome tariff deals once feared to hurt growth. Stocks primed for more highs as earnings stay strong and valuations hold Morgan Stanley’s Mike Wilson — long cautious — is now leaning S&P 500 bullish. In a fresh note, he projects the index at 7,200 within a year, anchored on $319 EPS and a 22.5x forward P/E. His call hinges on stronger-than-expected earnings momentum, aided by: Wilson also expects Fed rate cuts in early 2026 to provide a valuation tailwind — historically, falling rates and rising earnings have expanded multiples 90% of the time. Industrials remain his top pick despite recent outperformance, with names like Rockwell Automation, Eaton, Trane Technologies, and Johnson Controls set to benefit from infrastructure and tech spending. Risks? Higher long-term yields, tariff-related inflation, and seasonal market softness. Still, Wilson views any pullbacks as buy-the-dip opportunities heading into 2026.