02:37 PM EDT, 05/23/2025 (MT Newswires) -- US President Donald Trump announced potential new tariffs, including a 50% duty on imports from the European Union and a 25% levy on Apple ( AAPL ) iPhones not manufactured in the US, which triggered a sell-off impacting equities, bonds and commodities, Wells Fargo Investment Institute said in a note on Friday.

Wells Fargo said a pause on reciprocal tariffs helped support an equity rally over the past six weeks, while "US economic data has shown some capacity to resist a recession." However, renewed threats undermine that momentum and reinforce a cautious outlook, the investment advisory firm said.

Wells Fargo said its equity guidance prioritizes quality and prefers US equities over international due to lower trade dependence and recommends large-cap and mid-cap US stocks in technology, communication, financials and energy sectors.

European equities, S&P 500 futures, US Treasury yields, and crude oil futures all declined, while the US dollar strengthened as expectations rose for a European Central Bank rate cut, according to the note.

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