Markets had their champagne moment lined up on Friday, only for President Donald Trump to knock the bottle straight off the table, again.
The S&P 500 briefly touched a fresh all-time high at 6,187.68, a level that had investors quietly toasting a return to confidence. But just as quickly, the rally began to unwind. Trump took to Truth Social to declare that U.S.-Canada trade talks had been terminated, putting an abrupt end to a day that had started with optimism over fresh progress on China.
This isn’t a one-off slip. It’s a pattern.
Just a day earlier, Commerce Secretary Howard Lutnick had handed investors a sugar rush, saying that a trade framework with China had been finalised and that deals with ten other major partners were on the way. Markets surged on the idea that Trump’s earlier tariff tantrums might be giving way to more conventional deal-making. Traders piled into equities, and for a few hours, Wall Street looked set to round out the week on a euphoric note.
Then came Trump’s post. Just a few lines on social media, and the mood soured. The S&P gave up its gains and hovered near flat. The Nasdaq, which also hit a new high earlier in the session, slipped into the red. The Dow held up better, but even it lost momentum. It’s the latest example of how headline risk, especially when driven by the White House, can reverse a rally in real time.
Markets had started to believe we were past the worst of the tariff drama. After the S&P tumbled nearly 18% at its low in April, the assumption was that Trump’s bark was louder than his bite. Since then, he’s dialled back the harshest measures and hinted at a more pragmatic approach. That helped risk appetite return. Friday’s turnabout shows that assumption was premature.
The broader problem here is predictability, or rather, the lack of it. In the space of 24 hours, the narrative went from “ten trade deals incoming” to “talks with Canada are off.”
Despite the reversal, markets aren’t exactly falling apart. The S&P is still trading near record territory, and investors seem willing, for now, to give Trump the benefit of the doubt. Part of that is down to expectations of interest rate cuts and a broader appetite for risk. But it’s fragile. One poorly timed outburst, one scrapped deal, and the market mood can shift very quickly.
If we’ve learned anything from this presidency, it’s that markets can’t plan around momentum when momentum is always at the mercy of a single man’s social media account.
As the close approaches, both the S&P and Nasdaq have clawed back most of their losses. For now, the rally remains intact. Just don’t expect it to be calm.
Enjoy the weekend!