US Stocks Fall as Inflation Woes Rise and Tariffs Loom

*US stocks plummeted on Friday as investors grappled with the threat of additional tariffs from the Trump administration and a jump in consumer inflation expectations.*

Market Highlights

* The S&P 500 (^GSPC) slid 0.7%, while the Nasdaq Composite (^IXIC) shed around 1%.
* The Dow Jones Industrial Average (^DJI) also declined 0.7%.

Trump's Tariff Threat

* President Trump announced plans to impose reciprocal tariffs on American imports, raising concerns about escalating trade tensions with partner countries.
* Japan was mentioned as a potential target for tariffs specifically.

Inflation Concerns

* Consumer sentiment sank to a seven-month low in February, undershooting forecasts.
* Inflation expectations surged amidst worries about Trump's tariff threats.
* Americans now anticipate an inflation rate of 4.3% over the next year, a full percentage point higher than last month, according to the University of Michigan survey.

Treasury Yields and Jobs Report

* The 10-year Treasury yield rose to 4.5% following the release of the sentiment update and monthly jobs report.
* 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.

Company News

* Amazon (AMZN) shares plunged 4% after disappointing revenue guidance.
* Affirm Holdings (AFRM) soared over 22% on positive earnings results.
* E.l.f. Beauty (ELF) declined 20% after lowering its fiscal 2025 outlook.

Fed Policy Outlook

* Federal Reserve Bank of Chicago President Austan Goolsbee indicated that the central bank may pause its interest rate hikes for now but anticipates a downward trend in rates over the "next 12-18 months."

Trade War's Impact on Tech

* President Trump's trade war with China has targeted Silicon Valley giants.
* Google (GOOG) and Apple (AAPL) are facing antitrust probes in China.

Consumer Mortgage Outlook

* A poll by Fannie Mae revealed a shift in consumer expectations, with a decline in the belief that mortgage rates will decrease in the next year.
* The average 30-year mortgage rate has remained around 7% for most of 2025.

Jobs Report Analysis

* The January jobs report showed a mixed bag of results.
* Job creation fell short of expectations, but wages rose and the unemployment rate improved.

European Markets

* European stocks ended the week mostly steady, on track for their seventh consecutive weekly gain.
* The Stoxx 600 (^STOXX) index remained close to record highs.

Other Notable News

* Canopy Growth (CGC) and Newell Brands (NWL) released earnings.
* Chinese tech stocks rallied on hype around DeepSeek's AI model.