Highlights
Equities sold off Friday after the White House repeated the administration plans to impose big tariffs on China, Mexico and Canada, effective Saturday. The Dow Jones industrial average lost 0.8 percent, the S&P 500 fell 0.5 percent and the Nasdaq slipped 0.3 percent. US bond yields, the dollar and oil prices all rose.
Stocks were higher through midday amid news reports that Trump was likely to delay the tariffs. Equities erased their gains and fell into negative territory abruptly when the White House press secretary said the reports were incorrect and that goods from Mexico and Canada will see 25 percent tariffs and those from China will be hit by a 10 percent tariff, effective Saturday, as promised. Later, adding to the confusion, President Trump told reporters tariffs on oil and gas are likely by Feb 18 and that he plans tariffs on semiconductors. He also said Canada, Mexico and China cannot avoid tariffs.
In economic news, the market reacted favorably to as-expected core PCE price inflation figures, which bolstered the view that inflation is coming down, seen as prerequisite to rate cuts. Fed officials, meanwhile repeated that they are in no rush to cut rates.
Among sectors, big technology shares were mostly better although Apple sagged on somewhat disappointing earnings. Best were semiconductors, aerospace & defense, media and grocery stores. Lagging were energy, homebuilders, retail, apparel and drug stores.
Stocks were higher through midday amid news reports that Trump was likely to delay the tariffs. Equities erased their gains and fell into negative territory abruptly when the White House press secretary said the reports were incorrect and that goods from Mexico and Canada will see 25 percent tariffs and those from China will be hit by a 10 percent tariff, effective Saturday, as promised. Later, adding to the confusion, President Trump told reporters tariffs on oil and gas are likely by Feb 18 and that he plans tariffs on semiconductors. He also said Canada, Mexico and China cannot avoid tariffs.
In economic news, the market reacted favorably to as-expected core PCE price inflation figures, which bolstered the view that inflation is coming down, seen as prerequisite to rate cuts. Fed officials, meanwhile repeated that they are in no rush to cut rates.
Among sectors, big technology shares were mostly better although Apple sagged on somewhat disappointing earnings. Best were semiconductors, aerospace & defense, media and grocery stores. Lagging were energy, homebuilders, retail, apparel and drug stores.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
