Stocks slid on Friday as a mix of news related to tariffs and inflation worried traders. President Trump announced plans for reciprocal tariffs on trading partners, raising tariff levels to match those charged to the U.S. The Dow Jones Industrial Average fell 444.23 points, or 0.99%, to close at 44,303.40. The S&P 500 declined 0.95% to 6,025.99, and the Nasdaq Composite slid 1.36%, ending at 19,523.40.
#GlobalMarkets | US: Markets closed lower Friday as inflation and tariff fears spur a sell-off
Here are the updates! 👇 pic.twitter.com/9BfPLJ1DD3
— ET NOW (@ETNOWlive) February 8, 2025
“I’ll be announcing that next week,” said Trump during a meeting with the visiting Japanese Prime Minister. “We’ll have a news conference and lay it out pretty simple.”
Stocks To Watch | 📊Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/nITJhcDz1S
— ET NOW (@ETNOWlive) February 7, 2025
🇺🇸UMich Consumer #Sentiment eased 4.6% in early February — lowest reading since Jul 24
⚠️"Decline was pervasive" across age, wealth & political affiliation with worries that high inflation will return
🔻Current Conditions -7.1%
🔻Expectations -2.9% pic.twitter.com/AJXLTc1FB1— Gregory Daco (@GregDaco) February 7, 2025
The stock market was already on edge before Trump’s comments, as earlier consumer sentiment and job data pointed to a pickup in inflation. The yield on the 10-year Treasury spiked above 4.5% at its session high.
The University of Michigan’s consumer sentiment index preliminary reading reached 71.3. At the same time, the same report showed respondents anticipate the one-year inflation rate to hit 4.3%, the highest since November 2023. January’s jobs report showed that the unemployment rate fell to 4% from 4.1% and that average hourly earnings last month were higher than expected. After revenue growth forecasts disappointed investors, Amazon shares lost 4%, overshadowing better-than-expected fourth-quarter results.
“We’ve just had some disappointments in the traditionally non-disappointing tech or ‘Magnificent Seven’ areas, and I think we’re seeing some rotation away from those groups,” said Sam Stovall, chief investment strategist at CFRA Research. I don’t think we’re heading for a bear market, but expect some volatility and short-term disappointment.
The market has had a volatile week. Stocks fell on Monday after Trump announced 10% tariffs on China and proposed, then later paused, 25% levies on Canada and Mexico.
Dow drops amid new tariff fears
The S&P 500 then saw gains for three straight days before falling again on Friday. Bank of America has named freight company XPO a top pick and reiterated its buy rating.
The bank’s updated price target implies a 15.7% upside from Thursday’s close. “XPO continues to demonstrate solid momentum in generating Less-than-Truckload (LTL) service, yield, and productivity gains as it works to narrow the margin gap between it and best-in-class peer Old Dominion,” analyst Ken Hoexter wrote. The stock has substantially outperformed the broader market this year, rising around 12% year to date.
According to a tradition associated with the Super Bowl, stocks tend to perform better if an NFL team wins than an AFL team. However, Ryan Detrick, a technical analyst at Carson Group, argues that bad things tend to happen when Philadelphia teams win major sports championships. Each time the Philadelphia Athletics or Phillies won the World Series or the Eagles won the Super Bowl, it was followed by market turmoil or economic issues.
For his part, Sam Stovall of CFRA points out that in years when an old NFL or an NFC team wins the Super Bowl, the Dow Jones Industrial Average rises 82% of the time, with an average gain of 11.4%. When an AFC team wins, the market gains only 47% of the time, with just a 1.8% advance. More ETFs combining bitcoin exposure and derivatives entered the market this week.
Fund issuers are now working to bring strategies popular with stock investors, such as buffer funds, covered calls, and leveraged products, to the crypto ecosystem. This trend has been reinforced by changes in the regulatory environment under the Trump administration and the SEC Acting Chair Mark Uyeda’s moves in this direction.
