US Stocks Fall as Inflation Expectations Rise
Key Points:
* S&P 500 retreats 0.1%, Nasdaq Composite declines 0.5%
* Consumer sentiment falls to seven-month low in February
* Inflation expectations surge due to concerns over Trump's tariffs
US stocks turned lower on Friday, erasing earlier modest gains, as investors reacted to a jump in consumer inflation expectations and a mixed jobs report.
The major market indices slipped into the red after consumer sentiment data from the University of Michigan showed a decline to a seven-month low in February. Inflation expectations soared to 4.3% for the next year, a full percentage point higher than last month, driven by concerns about President Donald Trump's tariff threats.
The 10-year Treasury yield rose to 4.49% following the release of the sentiment and jobs data. The US economy added 143,000 jobs in January, below economist expectations, but still indicating resilience in the labor market. Unemployment ticked down to 4.0% from 4.1% in December.
Investors are closely monitoring market stability amidst concerns over Trump's tariffs and the potential for higher inflation. The jobs report has taken on increased importance for hopes of another Federal Reserve interest rate cut.
Despite the negative sentiment, the major market indices are still on track to close the earnings-filled week with marginal gains. However, uncertainties linger due to unpredictable tariff news from the Trump administration.