Wall Street Slumps As Trump Reignites China Trade Tensions, Nvidia Wipes Out Earnings Rally: What's Driving Markets Friday?

A strong May for U.S. equities is closing on a sour note, after President Donald Trump accused China of "totally" breaching a tariff agreement, raising new fears over trade disputes.

The White House is reportedly planning broader tech sanctions against China, with a proposed rule targeting companies majority-owned by already-sanctioned firms. According to people familiar with the matter, these firms would face new licensing conditions from the U.S. government, heightening pressure on Beijing.

Friday’s economic reports offered mixed signals. Although inflation showed signs of cooling, consumers pulled back on monthly spending, signaling weakening demand. Personal spending growth slowed to 0.2% in April, a sharp deceleration from 0.7% in March.

Meanwhile, Main Street is sending warning signals, as consumer sentiment remained deeply depressed, holding at a three-year low, according to the University of Michigan's final May reading. Moreover, year-ahead inflation expectations jumped to 4.5%, the highest since 1981.

Nvidia Corp. NVDA was the worst performer among the mega-cap names, sliding 4% and fully erasing the gains it had notched following Wednesday’s stronger-than-expected earnings release.

The broader market mirrored the decline. The S&P 500 fell 1% to 5,858 points, while the tech-heavy Nasdaq 100 tumbled 1.3% to 21,100—both marking their lowest levels of the week.

Only defensive sectors such as consumer staples and utilities managed to stay above water, as investors rotated into perceived safe havens amid geopolitical and economic unease.

Crude oil prices declined 1.5% to $60 a barrel amid speculation that OPEC+ could consider a production hike larger than the 410,000 barrels-per-day increase already planned. The group is set to meet Saturday.

Gold, often seen as a haven during market stress, failed to gain traction and dropped 0.9% to trade below $3,300 per ounce.

Cryptocurrency markets also faced headwinds. Bitcoin BTC/USD sank below $105,000, hitting its lowest level since May 20.

Friday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY fell 1% to $584.56.
• The SPDR Dow Jones Industrial Average DIA eased 0.5% to $420.37.
• The tech-heavy Invesco QQQ Trust Series QQQ fell 1.3% to $513.31.
• The iShares Russell 2000 ETF IWM slipped 1% to $204.09.
• The Consumer Staples Select Sector SPDR Fund XLP outperformed, up 0.7%; the Technology Select Sector SPDR Fund XLK lagged, down 1.6%.

Friday’s Stock Movers

Stocks reacting to earnings reports included:

• Costco Wholesale Corporation COST up 3.60%
• Dell Technologies Inc. DELL down 3.33%
• Zscaler, Inc. ZS up 8.24%
• Ulta Beauty, Inc. ULTA up 11.13%
• NetApp, Inc. NTAP down 0.57%
• The Cooper Companies, Inc. COO down 14.60%
• The Gap, Inc. GPS down 19.18%

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