US tariff plan: Wall Street set for weekly losses on trade war fears

US stock indexes recouped some losses on Friday, but were on track to end the week in the red as investors fretted over a possible global trade war following President Donald Trump`s promise to impose import tariffs on steel and aluminium. Europe has drawn up a list of U.S. products from bourbon to Harley Davidson motorbikes on which to apply tariffs if Trump carries out his plan, European Commission President Jean-Claude Juncker said.

"We`ve had tariffs put in place for aluminium and steel before, the market always finds a place through it," said Michael Mattioli, portfolio manager at Manulife Asset Management. "What would be more concerning is, if it`s going to be broad-based and not just steel and aluminium, but something to do with China or intellectual property."

U.S. Commerce Secretary Wilbur Ross played down the fears, saying "hysteria over tariffs is a lot to do over nothing." Trump`s announcement comes at a time when markets are already on edge over rising U.S. interest rates and bond yields.

At 12:33 p.m. ET, the Dow Jones Industrial Average  was down 0.59 percent to 24,464.21 and the S&P 500 was flat at 2,677.31. For the week, the Dow was down 3.4 percent and the S&P 2.3 percent.

The S&P industrial index slipped 0.53 percent, reflecting fears that raw materials costs will rise along with barriers to trade outside of the United States.

Shares of Boeing Caterpillar and 3M were among the biggest drags on the index.

The Nasdaq Composite  gained 0.35 percent to 7,205.75, led by a 22 percent jump in the shares of Nektar Therapeutics after two brokerages raised their price targets on its shares.

World stocks also tumbled on Friday, with investors flocking towards traditional safe havens including Japanese yen and gold.

McDonald`s slipped 4.5 percent after RBC lowered its price target on the stock and cut 2018 earnings estimate, citing disappointing early sales impact from $1, $2, $3 value menu. The stocks was the biggest drag on the S&P and the Dow.

J.C. Penney Co Inc shares fell 3 percent after the department store chain missed same store sales estimates.

Declining issues outnumbered advancers on the NYSE by 1,416 to 1,390. On the Nasdaq, 1,865 issues rose and 993 fell.