Stocks Fall as Trump's Tariffs Take Effect
* S&P 500 (^GSPC): -0.50%
* Nasdaq Composite (^IXIC): -0.28%
* Dow Jones Industrial Average (^DJI): -0.75%
Market Recap
Stocks swiftly rebounded from a DeepSeek-driven sell-off earlier in the week but came under pressure on Friday due to concerns over President Trump's tariff plans. Trump's announcement of tariffs on Canada, Mexico, and China, effective Tuesday, Feb. 4, fueled uncertainty in the market.
Canada and Mexico will face 25% tariffs, while China will receive 10% tariffs over issues related to fentanyl and illegal migration.
Market Outlook
Investors will monitor the impact of these tariffs, as well as other upcoming events:
* Earnings Reports: Quarterly results from major companies such as Amazon (AMZN), Alphabet (GOOGL), Chipotle (CMG), and Eli Lilly (LLY) are scheduled.
* Economic Data: The January jobs report and an onslaught of corporate reports will provide insights into the strength of the economy.
* Trump's Tariff Strategy: The market will closely follow developments in Trump's tariff strategy and its potential consequences.
Earnings Season
The S&P 500 is currently pacing for a 13.2% year-over-year earnings growth for the fourth quarter, driven by companies exceeding earnings expectations. This bullish trend is supported by continued strength in earnings despite market volatility.
Manufacturing Outlook
The ISM Manufacturing PMI is expected to break above 50 in January, signaling a potential turnaround in the manufacturing sector. Improvement in manufacturing could bolster stock prices due to its relationship with cyclical earnings growth.
Weekly Calendar
Monday:
* Economic data: S&P Global US manufacturing PMI, January final; Construction spending; ISM manufacturing
Tuesday:
* Economic data: Job openings; Factory orders; Durable goods orders final
* Earnings: Alphabet, AMD, Chipotle, PayPal, PepsiCo
Wednesday:
* Economic data: MBA mortgage applications; ADP Private Payrolls; S&P Global US services PMI final; ISM services index final
* Earnings: Disney, Ford, Qualcomm
Thursday:
* Economic data: Challenger jobs cuts; Initial jobless claims
* Earnings: Amazon, Eli Lilly, Hershey, Peloton
Friday:
* Economic data: Nonfarm payrolls; Unemployment rate; Average hourly earnings; Labor force participation rate
* Earnings: Canopy Growth, Newell Brands
Disclaimer: This analysis is based solely on information available publicly and may differ from other sources. Past performance is not necessarily indicative of future results.