The Dow Jones Industrial Average fell 444.23 points, or 0.99%, to close at 44,303.40 on Friday. The S&P 500 declined 0.95% to 6,025.99, and the Nasdaq Composite slid 1.36% to end at 19,523.40. Stocks dropped after President Trump announced plans for reciprocal tariffs on trading partners.
“I’ll be announcing that next week — reciprocal trade, so that we’re treated evenly with other countries,” said Trump during a meeting with the visiting Japanese Prime Minister. The market was already uneasy before Trump’s comments, as early consumer sentiment and jobs data pointed to a pickup in inflation. The University of Michigan’s consumer sentiment index reached 72.3, exceeding expectations.
Respondents anticipate the one-year inflation rate will hit 4.3%, its highest level since November 2023. January’s jobs report indicated that the unemployment rate fell to 4% from 4.1%, and average hourly earnings were higher than expected. Amazon lost 4% after the e-commerce giant’s guidance disappointed investors.
The company forecasted revenue growth of 5% to 9% for the first quarter. “We’ve just had some disappointments in the traditionally non-disappointing tech or ‘Magnificent Seven’ areas, and so I think we’re seeing some rotation away from those groups,” said Sam Stovall, chief investment strategist at CFRA Research.
Markets react to tariff announcement
It has been a volatile week. Stocks fell on Monday after Trump announced 10% tariffs on China over the weekend. He also proposed, then later paused, 25% levies on Canada and Mexico.
The S&P 500 then gained for three straight days on the tariff reprieve before falling again on Friday. Bank of America sees more upside for freight company XPO, naming it a top pick and reiterating its buy rating. The bank’s updated price target implies a 15.7% upside from Thursday’s close.
According to an old theory, stocks should perform better if an original NFL team like the Philadelphia Eagles wins the Super Bowl. But Ryan Detrick, a technical analyst at Carson Group, argues that when Philadelphia wins a Super Bowl or World Series, bad things happen. Each championship has been followed by economic troubles such as recessions or market crashes.
ETFs that combine bitcoin exposure and derivatives hit the market this week, signaling a growing ecosystem of crypto funds. The Trump administration’s approach to deregulation under SEC Acting Chair Mark Uyeda appears to support this trend, encouraging more advanced crypto investment strategies.
