Stocks drop on Friday as traders are cautious ahead of China trade talks: Live updates

Stocks traded lower Friday as investors await much-anticipated trade talks between U.S. and Chinese officials this weekend.

The S&P 500 edged lower by 0.1%. The Dow Jones Industrial Average lost 113 points, or 0.3%. The Nasdaq Composite traded about 0.1% lower, meanwhile.

Market sentiment improved somewhat this week after the U.S.-U.K. trade agreement, though traders are waiting to see what happens with China this weekend. Traders hope the U.K. agreement will establish a framework for the U.S. to quickly strike more deals with major nations, even though a 10% tariff rate on the U.K. appears to be the baseline for the globe.

“Many Trade Deals in the hopper, all good (GREAT!) ones!,” said Trump on Truth Social, a day after announcing a preliminary trade agreement with the U.K., which marked the first deal between the U.S. and a global trading partner since Trump’s “reciprocal” tariff announcement in early April.

The president also wrote on Truth Social that an “80% Tariff on China seems right” ahead of talks led by Treasury Secretary Scott Bessent with China counterparts in Switzerland this weekend.

While this is a de-escalation somewhat from the current 145% tariff on China, it’s still higher than many expected where the administration would go to jumpstart talks. Bloomberg News had reported earlier that the rate could be lowered below 60% as soon as this week. It was also unclear if the president is talking about a long-term tariff rate on China or a temporary one during negotiations.

“While trade with the UK pales in comparison to trade with our neighbors to the North and South, and especially in comparison to China, it is an important test case and a model for what could be accomplished,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. “If the administration can follow this up with additional agreements, it would go a long way toward healing a stock market that has been battered and bruised this year.”

Week to date, the S&P 500 is on pace for a 0.7% loss, while the Nasdaq is on track to lose about 0.6%. The Dow is down roughly 0.2%.