US Stocks Slip as Trade Tariffs, Inflation Concerns Loom
US stocks fell on Friday as investors reacted to the threat of additional tariffs from the Trump administration and digested a surge in consumer inflation expectations.
The S&P 500 (^GSPC) declined by 0.7%, while the technology-heavy Nasdaq Composite (^IXIC) dropped by nearly 1%. The Dow Jones Industrial Average (^DJI) also fell by 0.7%, continuing a mixed day for stocks on Wall Street.
President Donald Trump announced plans for reciprocal tariffs on American imports, targeting potential measures against Japan. This announcement, combined with rising inflation expectations, triggered a sell-off in the markets.
A survey by the University of Michigan revealed that American consumers now expect an inflation rate of 4.3% over the next year, significantly higher than last month's estimate. The 10-year Treasury yield increased to 4.5% following the sentiment update and the release of the monthly jobs report.
The US economy added 143,000 jobs in January, falling short of analyst expectations but still indicating resilience in the labor market. Unemployment ticked down to 4.0% from 4.1% in December.
Amazon's (AMZN) earnings report disappointed investors, with the company facing revenue headwinds and declining stock prices. Shares in Amazon dropped by 4%.
Key News and Updates
* The Federal Reserve may pause interest rate hikes, but economist Austan Goolsbee anticipates lower rates within the next 12-18 months.
* President Trump's trade war with China has escalated, with potential investigations into Google and Apple by Chinese authorities.
* Consumer sentiment has reached a seven-month low due to inflation concerns, with one-year inflation expectations jumping to 4.3%.
* The average 30-year mortgage rate has hovered around 7% for all of 2025, leading potential homebuyers and sellers to adjust their expectations.
* The jobs report showed signs of resilience in the labor market, with a lower unemployment rate and higher hourly wages.