Home Stock market today: Dow, S&P 500, Nasdaq stumble as Trump recommits to sweeping tariffs on Saturday

Stock market today: Dow, S&P 500, Nasdaq stumble as Trump recommits to sweeping tariffs on Saturday

· February 1, 2025 · 0 Comment
  • Tariffs against Mexico, Canada, and China will take effect on Saturday, the White House said Friday, sending stocks lower and brushing aside more optimistic news that carried most of the trading day.
  • White House press secretary Karoline Leavitt said the president would impose 25% tariffs on goods from Mexico and Canada, as well as a 10% tariff on goods from China.
  • All three major gauges fell into the red Friday. The S&P 500 (^GSPC) lost 0.5% at the closing bell, while the Dow Jones Industrial Average (^DJI) shed 0.8%. The tech-heavy Nasdaq Composite (^IXIC) gave up 0.3%, reversing earlier gains.
  • The dramatic tariff news eclipsed solid earnings from Apple (AAPL) and an inflation reading that matched expectations.
  • Among the major players to report quarterly earnings next week are Google parent Alphabet (GOOG, GOOGL) and Amazon (AMZN).
  • Investors will be eager to learn how the tech giants are responding to the success of the Chinese startup DeepSeek, which sparked a panic on Wall Street and prompted questions about the massive AI spending of US tech companies.
  • The members of the Magnificent Seven will follow a somewhat mixed showing from their peers, including Meta (META), Apple (AAPL), and Microsoft (MSFT). While a largely strong showing from corporate America has buoyed stocks in recent weeks, the latest indication from the White House that the Trump administration will impose tariffs on Canada, Mexico, and China will add volatility to next week’s trading.
  • The end of the week will also bring a crucial set of economic news, the January jobs report, a key reading that the Federal Reserve will be watching closely.
  • The US dollar (DX=F, DX-Y.NYB) is on track to secure its best week since mid-November as a looming tariff deadline pushes the greenback currency to new heights.
  • The US Dollar Index, which measures the dollar’s value relative to a basket of six foreign currencies — the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc — rose about 0.5% on Friday to rebound from its worst performance in over a year last week.
  • The index has gained around 8% since its September lows and is up about 5% since Election Day.
  • The dollar’s price action has largely been driven by two main catalysts: President Trump’s election and the subsequent Republican sweep, along with the recalibration of future Fed easing in the face of strong economic data.
  • But the unknown of Trump’s tariff policy has been the biggest driver in recent weeks and looks set to remain that way in the months ahead.
  • “In case there was any lingering doubt, investors are judging tariffs to be a dollar-positive, as we had anticipated,” Capital Economics senior markets economist James Reilly wrote in a note published on Friday.
  • But “for all the attention tariffs have received in recent months, they are far from priced in,” he warned.
  • On Friday, the White House reiterated President Trump’s plan to enact 25% tariffs on Mexico and Canada as soon as Saturday, denying an earlier Reuters report that suggested Trump is weighing a tariff plan that includes a delay on implementation by a month.
  • According to Reilly, elevated volatility in currency markets reflect traders “appear to be bracing for something,” but also said they seem reluctant to take Trump at his word.
  • “That’s a key reason why we think the dollar still has a bit more upside if, as remains our working assumption for now, a 10% universal tariff and 60% levy on imports from China are imposed around Q2,” he said.
  • Two of the major gauges sank into the red Friday afternoon as the White House confirmed plans to move forward with tariffs on Canada, Mexico, and China on Saturday.
  • “I can confirm that, tomorrow, the Feb. 1 deadline President Trump put into place with a statement several weeks ago continues,” said White House press secretary Karoline Leavitt during Friday’s press conference.
  • Leavitt said the tariffs on Mexico and Canada would amount to a 25% duty, while China would receive a 10% tariff. It was not immediately clear what exemptions, if any, would apply to goods from those countries.
  • The tech-heavy Nasdaq Composite (^IXIC) remained in the positive but lost ground, up just 0.3%. The S&P 500 (^GSPC) lost 0.2% Friday, while the Dow Jones Industrial Average (^DJI) shed 0.7%
  • Robotaxis “in the wild” by this summer — that’s Tesla (TSLA) CEO Elon Musk’s latest promise to investors.
  • Musk, for nearly a decade now, has claimed his company had the hardware needed to deliver full self-driving vehicles. Now, investors are questioning whether Musk is again being a hopeless optimist or if autonomous Teslas are another grand promise that we’ll never see, reports Yahoo Finance’s Yasmin Khorram.
  • Today’s regulations around autonomous vehicles vary state by state. Roughly half of US states have their own statutes for autonomous transportation. Legal experts told Yahoo Finance that Musk will have to navigate a regulatory maze to deliver on his FSD promise.
  • William Blair analyst Jed Dorsheimer wrote on Thursday that he has “learned to tack 6 to 12 months on Musk’s Full Self-Driving (FSD) optimism.”
  • Read more about Tesla’s robotaxi plans here.
  • As gold futures touched new records on Friday, Goldman Sachs analysts reiterated their bullish call on the precious metal given the looming potential of US tariffs against Mexico and Canada, reports Yahoo Finance’s Ines Ferré.
  • “Elevated US policy uncertainty reinforces the diversifying role of commodities in investment portfolios. In particular, we continue to see value in long gold … as a hedge against several tail risks,” the analysts wrote.
  • The firm sees tariff escalations and US debt fears as the major risks expected to send gold prices higher.
  • Bullion futures (GC=F) rose past $2,860 per ounce on Friday, on pace for its fifth consecutive week of gains.
  • The rise in gold comes despite the Federal Reserve’s decision to hold rates steady, a move which is typically a headwind for the precious metal as lower interest rates spur more buying of the asset.
  • Read more about gold’s rise here.
  • US stocks rose Friday afternoon coming off solid earnings from Apple (AAPL) and as the Federal Reserve’s preferred inflation gauge matched expectations. Despite the fears of a looming tariff deadline, investors are on pace for a winning month.
  • The tech-heavy Nasdaq Composite (^IXIC) climbed 1.3%, boosted from solid tech earnings. The S&P 500 (^GSPC) moved up roughly 0.8%, while the Dow Jones Industrial Average (^DJI) rose 0.2% both moving up on Thursday’s gains.
  • In the final trading hours of January, all three major gauges were also set to score wins for the month. The Nasdaq is on track for a 2.3% gain. The S&P is set for a 3.5% increase, while the Dow leads the trio with an expected jump of 5.6% for January.
  • When the Chinese upstart DeepSeek sparked a panic on Wall Street, questioning the massive AI spending of the US tech giants, President Trump urged the industry to take it as a “wake up call.“
  • Trump is set to continue his advocacy for US AI dominance as he huddles with Nvidia CEO Jensen Huang the White House on Friday, Reuters reported. The Trump administration is considering tightening the sale of Nvidia’s export controls-compliant H20 chips to the China market, in an effort to further stall AI progress outside the US and its ally nations.
  • The meeting comes as the White House searches for new ways to boost US competitiveness, including further restrictions on tech exports to China. The US is already set to enact a new set of export controls designed to maintain the country’s technological edge in the interest of national security.
  • The latest reading on inflation did little to change market thinking on the Fed’s interest rate approach, as traders kept their bets that the next rate cut likely won’t arrive until at least June.
  • On Friday the latest reading of the Fed’s preferred inflation gauge showed prices increased in line with expectations in December as inflation remained above the Fed’s 2% target.
  • The steady progress, or lack of a major turn, appeared to solidify the market’s forecasting on rate cuts. The chances of a cut at the Fed’s June meeting stand at nearly 70%, the first month in 2025 where the probability exceeds 50%, according to the CME FedWatch tool.
  • The inflation data followed Chair Powell’s announcement on Wednesday that the Fed would keep rates steady. At the press conference he underscored a wait-and-see approach toward the economic uncertainty and trade policies of the Trump administration.
  • The AI-inspired super cycle that Apple bulls predicted has still not arrived, but the company’s overall performance last quarter lifted shares amid a mixed earnings season for Big Tech.
  • Apple stock rose more than 2% during morning trading Friday after the iPhone maker posted fiscal first quarter earnings on Thursday. Cupertino beat expectations on the top and bottom lines but fell short on iPhone revenue.
  • After arriving late to the big AI push in the tech world, Apple Intelligence was framed as an intuitive set of AI features that would encourage users to upgrade their devices.
  • But some analysts worry that the AI tools aren’t enough to trigger the hoped-for supercycle of upgrades. Still, Apple’s approach to AI has been rewarded in recent days as other Big Tech peers were punished after the breakout success of the Chinese startup DeepSeek. Apple shares rose during the market panic.
  • The latest reading of the Federal Reserve’s preferred inflation gauge showed prices increased in line with expectations in December as inflation remained above the Fed’s 2% target.
  • The “core” Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 0.2% from the prior month during December, meeting Wall Street’s expectations. The reading was higher than the 0.1% increase seen in November.
  • Over the prior year, core prices rose 2.8%, in line with Wall Street’s expectations and unchanged from November. On a yearly basis, overall PCE increased 2.6%, a pickup from the 2.4% seen in November.
  • Read more here.
  • One of the biggest losers early Friday was Deckers Outdoor (DECK) stock. Deckers is the company behind shoe brands UGG and HOKA, which boasts a portfolio of some of the most comfortable footwear around.
  • The stock was down as much as 14% in premarket trading.
  • Last night, the company said its sales for its fiscal year 2025 — which is set to end in March — would rise 15% to $4.9 billion, a slowdown from the 17% growth reported in its third quarter and a slowdown from the 18% growth seen in its fiscal 2024.
  • Deckers stock, one of the best-performing stocks in the S&P 500 (^GSPC) over the last five years, closed at a record high on Thursday ahead of the results.
  • That success, however, appears to have caused some of the agita in markets early Friday. As MScience analyst Drake MacFarlane told Reuters, the company’s guide “looks pretty conservative, and considering the beat, it’s a bit of a negative read into the out quarter.”
  • At Decker’s two biggest brands — HOKA and UGG — sales rose 23.7% and 16.1%, respectively, in the holiday quarter.
  • My award for best 2025 earnings call for an interim CEO award goes to Intel’s (INTC) co-interim CEO Michelle Johnston Holthaus.
  • “There are no quick fixes,” Holthaus started her earnings call with last night. She then followed that with a host of no-BS comments on the state of the chipmaker.
  • I liked it! I wish more execs didn’t blow smoke in the face of investors, analysts, and media.
  • Then again, everyone knows Intel is in a real bad place right now, so it doesn’t hurt to be bluntly honest.
  • Holthaus’s comments and those by co-interim CEO David Zinsner on the foundry business (it’s not getting out of the cash-draining business — at least not this year) suggest Intel is in for another brutal 2025. Cost cuts will make the bottom line feel less brutal, but this is likely a dead money stock until a permanent CEO is announced in the coming months.
  • Tim Cook’s bullish comments on Apple Intelligence on a conference call are, in large part, driving the premarket bid in Apple (AAPL), based on what I am seeing.
  • I can appreciate the enthusiasm about the product and what it may mean to the company’s services business. But Apple didn’t exactly blow minds with its results.
  • China sales tanking 11% year on year is a big deal. Commentary about China on the call suggests a recovery in the business is a few quarters away.
  • “While services remain strong and the mix is shifting toward higher margin, our concerns around: 1) lack of a US upgrade cycle; 2) China competition; and 3) an unlikely inflection across all products/geographies remain,” KeyBanc analyst Brandon Nispel wrote in a client note this morning.
  • Nispel reiterated an Underweight rating (Sell equivalent) on the stock.
  • Hat tip, Brandon, on the blunt analysis.

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