US stock futures and global stock markets fell sharply on Friday, reacting quickly to a surprise move by the self-described “Tariff Man”, President Donald Trump, to impose tariffs on all Mexican goods.

Reacting to what was described as “Mexico’s passive cooperation in allowing this mass incursion”, the president vowed to tariff America’s third-largest trading partner with a 5% tariff starting June 10, widening to 25% on October 1, unless Mexico takes satisfactory action to halt the migrants.

The new front with Mexico comes after Trump declared a state of emergency over the migrant situation at the US-Mexico border earlier this year, and in spite of aggravating trade-war rhetoric from Beijing, saying it’s ready to restrict the sale of rare-earth minerals to America.

Trump’s Mexico declaration and China’s retaliation leave markets set for a turbulent end to what had been a rough month for global risk assets. Treasuries have benefited from haven demand, with yields on 10-year notes down to 2.16%, compared with 2.50% at the start of the month.

This morning’s decline looks to make light work of yesterday’s US and European equity rebound, were stocks finished slightly higher after shaky day of trading as investors reacted to mounting global slowdown concerns.

The S&P 500 finished +0.27% higher, bouncing from its lowest close since early March, but having swung from gains of as much as +0.6%, to a decline of as much as -0.2% during the session.

The Nasdaq Composite and Dow Jones Industrial Average saw similar gains, up +0.42% and +0.24% respectively.

Ahead, in today’s economic calendar, Friday includes; Personal Income and Spending data for April at 8:30am EST, a Chicago PMI figure for May at 9:45am EST, and Consumer Sentiment for May at 10am EST.

In earnings, Big Lots (BIG) and Conn’s (CONN) are amongst the last few major companies scheduled to report this month.

Mexico & Trade: Trump says US will impose 5% tariff on all Mexican imports from June 10. (CNBC)
The US will impose a 5% tariff on all Mexican imports from June 10 and duties of up to 25% will be added in the coming months if Mexico does not take action to “reduce or eliminate the number of illegal aliens” crossing into the US, the White House said Thursday.

China & Trade: After US Blacklisting of Huawei, China Plans ‘Unreliable’ Foreigners List. (The WSJ)
China plans to set up a list of foreign companies and other entities that the government deems unreliable, as Beijing ups the pressure in its escalating trade dispute with the US.

Today’s Economical Announcements.

08:30AM – ★☆☆ – Personal Income (MoM) (Apr) (Previous: 0.1%)
08:30AM – ★★☆ – Personal Spending (MoM) (Apr) (Previous: 0.9%)
09:45AM – ★★☆ – Chicago PMI (May) (Previous: 52.6)
10:00AM – ★★☆ – Michigan Consumer Expect. (May) (Previous: 96.0)
10:00AM – ★★☆ – Michigan Consumer Senti. (May) (Previous: 102.4)

Pre-Market Movers & News Related Stocks.

Big Lots (BIG): [EARNINGS] Reported adjusted quarterly earnings of 92 cents per share, compared to a consensus estimate of 70 cents a share. Revenue was slightly above forecasts, although comparable-store sales were up a less-than-expected 1.5%. Big Lots also raised its full-year profit forecast.

Genesco (GCO): [EARNINGS] Earned an adjusted 33 cents per share for its latest quarter, well above the consensus estimate of 4 cents a share. Revenue beat forecasts as well, and a comparable-store sales increase of 5% beat the 0.6% consensus of analysts polled by Refinitiv.

Williams-Sonoma (WSM): [EARNINGS] Came in 12 cents a share above estimates, with quarterly earnings of 81 cents per share. The housewares retailer’s revenue matched Street forecasts. Comparable-store sales were up 3.5%, more than double the 1.7% consensus estimate. Williams-Sonoma also raised its full-year earnings outlook.

Ford Motor (F), General Motors (GM): [NEWS] These and other auto stocks are falling this morning following President Donald Trump’s threat to impose tariffs on Mexican imports.

Okta (OKTA): [EARNINGS] Reported an adjusted quarterly loss of 19 cents per share, 2 cents a share smaller than Wall Street had expected. The maker of identity management software also saw better-than-expected revenue during the quarter, as subscription revenue grew 52% compared to a year earlier.

Uber Technologies (UBER): [EARNINGS] Posted a loss of $1.01 billion in its first quarter as a public company, matching Wall Street’s forecasts. Revenue was slightly above expectations and up 20% over a year earlier.

Ulta Beauty (ULTA): [EARNINGS] Reported quarterly profit of $3.26 per share, compared to a consensus estimate of $3.07 a share. The cosmetics retailer’s revenue was slightly below forecasts, with comparable-store sales in line with estimates. Ulta also raised its full-year guidance.

Gap Inc. (GPS): [EARNINGS] Earned an adjusted 24 cents per share for its latest quarter, 8 cents a share below consensus forecasts. The apparel retailer’s revenue was also below forecasts, and a same store sales decline of 4% was larger than the 1.2% drop that analysts had been expecting. The same-store sales decline was most prominent at the Gap flagship brand. (AMZN): [NEWS] Amazon is interested in buying Boost Mobile from T-Mobile US (TMUS) and Sprint (S), according to Reuters.

Costco (COST): [EARNINGS] Beat estimates by 7 cents a share, with adjusted quarterly profit of $1.89 per share. The warehouse retailer’s revenue was also above forecasts. Comparable-store sales rose 5.5%, just under the consensus forecast for a 5.6% increase.

Dell Technologies (DELL): [EARNINGS] Reported adjusted quarterly earnings of $1.45 per share, 24 cents a share above estimates. The computer maker’s revenue came in below forecasts on slowing demand in China.

Kraft Heinz (KHC): [UPGRADE] Piper Jaffray upgraded the food maker’s stock to “neutral” from “underweight,” saying caution about the company’s outlook is reflected in its current valuation. The stock has lost more than half its value over the past year.