07:33 AM EDT, 07/11/2025 (MT Newswires) -- US equity markets were tracking in the red before Friday's open after President Donald Trump announced tariffs on Canada and threatened to impose blanket duties on most other trading partners.

The S&P 500 and the Nasdaq declined 0.6% each in premarket activity, while the Dow Jones Industrial Average was off 0.7%. The indexes finished the previous trading session higher, with the S&P 500 and the Nasdaq both notching new record closing highs.

In a letter sent to Canada on Thursday, Trump said the US will impose 35% tariffs on Canadian imports, effective Aug. 1, separate from all sectoral tariffs. The rate will go up if Canada retaliates, the letter said.

"Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses," Canadian Prime Minister Mark Carney said in a post on X. "We will continue to do so as we work towards the revised deadline of Aug. 1."

At the end of last month, the US and Canada agreed to resume negotiations to finalize a trade deal by July 21. Canada cancelled a proposed digital services tax on technology firms to advance trade negotiations with the US, after Trump threatened to scrap discussions due to the tax.

In an interview with NBC News on Thursday, Trump said he plans to impose blanket tariffs of 15% or 20% on most trade partners. "We're just going to say all of the remaining countries are going to pay, whether it's 20% or 15%," according to Trump.

Earlier in the week, Trump said he would impose 50% tariffs on Brazilian imports and sent letters to 14 nations, including Japan, South Africa, Malaysia and Thailand, informing them of their new reciprocal tariff rates, beginning next month.

US Treasury yields were moving higher in premarket action, with the two-year rate rising 2.1 basis points to 3.89% and the 10-year rate climbing 4.9 basis points to 4.39%.

Federal Reserve Governor Christopher Waller said Thursday that the central bank could consider lowering the main benchmark lending rate later this month because any tariff-driven inflation will be temporary, according to media reports. "I think we're just too tight and we could consider cutting the policy rate in July," according to Waller.

St. Louis Fed President Alberto Musalem said Thursday it was too soon to determine whether tariffs will have a persistent impact on inflation, Bloomberg News reported. "There's a scenario where we could be in (the fourth quarter) this year, or (the first or second quarter) of next year where tariffs are still working themselves into the economy," Musalem reportedly said.

On Wednesday, minutes from the central bank's June meeting showed that policymakers offered mixed views on the monetary policy path ahead, with opinions ranging from "some reduction" in interest rates this year to no cuts at all. The Fed kept its benchmark lending rate unchanged for a fourth consecutive time at the meeting.

Friday's thin economic calendar has the weekly Baker Hughes oil-and-gas rig count at 1 pm ET. West Texas Intermediate crude oil edged up 0.7% to $67.03 a barrel before the opening bell.

Shares of MP Materials ( MP ) increased 3.4% pre-bell after closing the previous trading session up 51% as the company outlined a plan to construct a rare-earth magnet manufacturing facility in the US, under a private-public partnership with the Department of Defense. Levi Strauss (LEVI) stock advanced 7.4% as the denim maker lifted its full-year earnings and revenue outlook on the back of stronger-than-expected fiscal second-quarter results.

Gold rose 0.9% to $3,357 per troy ounce, while bitcoin spiked 4.2% to $118,126.