U.S. stocks declined on Friday after the White House announced that tariffs on Mexico, Canada, and China would take effect on Saturday, reigniting concerns about a looming trade war with the nation's closest trading partners. White House Press Secretary Karoline Leavitt stated that the president would impose 25% tariffs on goods from Mexico and Canada, as well as a 10% tariff on goods from China.
All three major indices fell into the red on Friday. The S&P 500 (^GSPC) lost 0.5% at the closing bell, while the Dow Jones Industrial Average (^DJI) shed 0.8%. The tech-heavy Nasdaq Composite (^IXIC) gave up 0.3%, reversing earlier gains. The dramatic tariff news overshadowed more optimistic updates from earlier in the day, which had boosted stocks. Solid earnings from Apple (AAPL) and an inflation reading that matched expectations lifted market sentiment for much of the day. The S&P and the Nasdaq posted losses for the week of 1% and 1.6%, respectively. The Dow, meanwhile, recorded a weekly gain of 0.3%.
The looming Saturday tariff deadline has revived worries about the impact on the economy from a clampdown on the US's biggest trading partners. Read more: The latest news and updates as Trump's tariff deadline approaches.
On social media, Trump also warned BRICS countries that they will face 100% tariffs if they replace the dollar with their own joint currency or another. The dollar (DX-Y.NYB) rose, headed for its best week since November.
The uncertainty over tariffs has left Federal Reserve Chair Jerome Powell in wait-and-see mode, with the potential for tariffs to inflame inflation in focus.
That put the spotlight on a fresh reading of the Fed's preferred inflation gauge, the Personal Consumption Expenditures index. The "core" PCE reading, which strips out food and energy, rose 2.8% year over year in December, meeting economist estimates.
Wall Street traders continue to wager that the Fed's first rate cut of the year won't arrive until at least June, according to the CME FedWatch tool.