US Stocks Fall Amid Tariff Concerns and Mixed Economic Data
US stock markets declined on Friday as investors grappled with the potential impact of additional tariffs from the Trump administration and digested a mixed jobs report.
Trump's Tariff Threats
President Donald Trump announced plans to impose reciprocal tariffs on American imports, raising concerns about a trade war with China and other major trading partners. These comments contributed to market volatility.
Consumer Sentiment and Inflation Expectations
The University of Michigan's consumer sentiment index fell to a seven-month low in February, undershooting forecasts. Inflation expectations jumped to 4.3%, a full percentage point higher than the previous month. These findings indicate growing consumer anxiety about the rising cost of living.
Major Averages Fall
The S&P 500 (^GSPC) closed 0.7% lower, while the Nasdaq Composite (^IXIC) fell by approximately 1%. The Dow Jones Industrial Average (^DJI) also declined by 0.7%.
Tech Sector Disappoints
Amazon (AMZN) shares dropped 4% after the e-commerce giant reported disappointing revenue guidance, dragging down the tech-heavy Nasdaq.
Jobs Report
The US economy added 143,000 jobs in January, below economists' expectations of 173,000. However, hourly wages increased by 0.5%, indicating continued strength in the labor market. The unemployment rate ticked down to 4.0%.
Treasury Yield Rises
The 10-year Treasury yield rose to 4.5% following the consumer sentiment data and jobs report. This increase reflects investor concerns about rising inflation and the potential impact on interest rates.
Looking Ahead
Investors will continue to monitor developments regarding trade negotiations and economic data as they gauge the outlook for US stocks in the coming weeks.