U.S. Dollar Drops to Nearly Three-Year Low, Stocks Head Lower Amid Trade Policy Flip-Flops

Barry Adams
12 Jun, 2025
New York City

Wall Street indexes declined on Thursday as the U.S. president threatened additional tariffs ahead of the looming deadline. 

The S&P 500 index decreased 0.2%, and the tech-heavy Nasdaq Composite declined 0.1%, and Donald Trump announced he would impose additional tariffs if key trading partners failed to agree on a deal before the impending deadline on July 9. 

The "sell America" narrative is taking hold as investors pivot to increasing their allocations to financial markets in the eurozone and Asia. 

Moreover, the constantly changing trade policy of the Trump administration has also dimmed the safe-haven status of the U.S.

The U.S. dollar index dropped to 97.8, the lowest level since 2022, and the credibility of the Trump administration took another hit after Chinese officials refused to confirm details of the recently agreed "U.S.-China trade framework."

The measure of wholesale inflation increased in May, confirming the expectations set by economists. 

The producer price index inched up 2.6% in May, from the upwardly revised 2.5% in April, the U.S. Bureau of Labor Statistics reported Thursday. 

The core rate of producer price inflation, which excludes food and energy, inched lower to 3.0% from 3.2% in the previous month. 

 

Continuing Jobless Claims Advance to 4-Year High

Initial jobless claims held steady at the end of last week; however, continuing claims rose, the Department of Labor reported in its weekly update on Thursday. 

First-time filings for unemployment insurance were unchanged at 248,000 at the end of the week ending June 7, flat from the upwardly revised previous week's claims. 

Meanwhile, continuing claims, which lag by one week, advanced by 54,000 to 1.96 million. and rose to the highest since mid-November 2021. 

Initial jobless claims filed by the federal employees, which are not included in the weekly count, increased by 23 to 561. 

The federal employees' claims are tracked through a separate system and are closely watched because of the recent dismissals by the Department of Government Efficiency.

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index decreased 0.1% to 6,013.74, the Nasdaq Composite edged down 0.1% to 19,601.03, and the Russell 2000 index declined 0.7% to 2,132.87.

The yield on 2-year Treasury notes edged lower to 3.89%, 10-year Treasury notes decreased to 4.37%, and 30-year Treasury bonds declined to 4.84%.

WTI crude oil decreased $0.81 to $67.34 a barrel, and natural gas prices edged higher by $0.09 to $3.60 a thermal unit.

Gold increased by $26.74 to 3,392.02 an ounce, and silver edged down by $0.11 to $36.24.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.78 to 97.86 and traded at the lowest level since April 2022.

 

U.S. Movers 

Boeing Company declined 6% to $201.06 after an Air India Dreamliner 787 crashed after takeoff with 242 passengers on board. 

After the crash news, engine makers and other systems suppliers to Boeing fell. 

General Electric Company fell 2.2% to $239.13, and Spirit AeroSystems Holdings dropped 2.1% to $37.32. 

Oracle Corporation soared 8.6% to $191.50 after the company's fiscal fourth-quarter results surpassed market expectations, and the company signaled additional cloud revenue growth ahead.