04:30 PM EDT, 07/11/2025 (MT Newswires) -- US benchmark equity indexes closed lower on Friday as trade tensions flared after President Trump threatened stiff tariffs on Canada.

The Nasdaq fell 0.2% to 20,585.53 while the S&P 500 declined 0.3% to 6,259.75. The Dow Jones Industrial Average fell 0.6% to 44,371.51. Among sectors, energy led the gainers while financials had the steepest decline.

US Treasury yields were higher, with the 10-year rate gaining 6.9 basis points to 4.42% and the two-year rate rising 1.3 basis points to 3.90%.

August West Texas Intermediate crude oil rose 3.2% to $68.69 a barrel on Friday.

President Donald Trump informed Canada in a letter on Thursday of a new 35% tariff on Canadian imports, effective August 1, separate from existing sectoral tariffs. The letter warned of escalating rates if Canada retaliates.

Canadian Prime Minister Mark Carney, in a post on X, affirmed his government's commitment to defending Canadian workers and businesses throughout ongoing trade negotiations, vowing to continue efforts ahead of the revised August 1 deadline.

The proposed tariff rate seems only for goods not covered by the US-Mexico-Canada Agreement, "so its scope would be more limited," Deutsche Bank said in a Friday client note.

In economic news, the US Treasury reported a $27.01 billion budget surplus in June, compared with a $70.97 billion budget deficit a year earlier. The monthly deficit was $315.65 billion in May.

In company news, Halliburton ( HAL ) shares were up 4.2%, the top gainer on the S&P 500, after TD Cowen raised its price target to $36 from $32. The firm maintained its buy rating.

United Airlines (UAL) and JetBlue Airways ( JBLU ) shares were down 4.3% and 3.7% respectively. The companies' proposed Blue Sky partnership could reduce competition and raise fares, Democratic Senator Richard Blumenthal warned in a letter to the companies' chief executives, Reuters reported.

Gilead Sciences ( GILD ) was among the worst performers on the S&P 500, down 4.3%, as HSBC reduced its price target on the stock to $91 from $93.

Gold increased 1.4% to $3,371.20 per troy ounce, and silver was up 5.1% to $39.19 per troy ounce.