U.S. stock markets closed sharply lower on Friday as renewed trade tensions, weak consumer sentiment, and a mixed jobs report rattled investors. The three major stock indexes posted steep declines, with losses accelerating after reports surfaced that former U.S. President Donald Trump plans to announce new tariffs.
The Dow Jones Industrial Average fell 444.23 points, or 0.99%, to 44,303.40. The S&P 500 dropped 57.58 points, or 0.95%, to 6,025.99, while the Nasdaq Composite slid 268.59 points, or 1.36%, to 19,523.40. All three indexes posted weekly losses.
Jobs Report Sends Mixed Signals
The U.S. economy added 143,000 jobs in January, significantly lower than December’s revised total of 307,000. The report was influenced by annual benchmark revisions, California wildfires, and extreme weather conditions. Despite the slowdown in job growth, the unemployment rate unexpectedly dipped to 4.0% from 4.1%, while wages grew faster than anticipated.
“It’s a mixed bag,” said Rob Williams, chief investment strategist at Sage Advisory Services. “It was a miss on the headline, but the revisions over the last two months were positive, and hourly earnings were also up.”
A separate report from the University of Michigan revealed a sharp decline in consumer sentiment, with inflation expectations rising.
Trade War Fears Weigh on Markets
Markets took another hit after Trump signaled he would announce a new round of reciprocal tariffs on multiple countries next week.
“Anytime you play a game of chicken, which is very clearly what Trump is doing, what if somebody decides to go too far and we end up with a car crash?” said Michael Green, chief strategist at Simplify Asset Management.
“Ultimately, what Trump is taking advantage of is a very unbalanced negotiation. At the end of the day, the customer is always right,” Green added. “And for the vast majority of the world, the U.S. is the primary customer.”
Tech Stocks Struggle
Disappointing earnings from major tech firms added to the market’s woes. Amazon reported sluggish growth in its cloud computing business and lower-than-expected first-quarter revenue and profit, following similar lackluster results from Microsoft and Alphabet earlier in the week.
The losses in tech stocks raised concerns that the sector, which has driven much of the market’s recent rally, may be losing momentum.
Global Markets and Bond Yields React
European stocks followed Wall Street’s decline, with the STOXX 600 index dropping 0.38% and the FTSEurofirst 300 falling 0.39%. Emerging market stocks edged higher by 0.37%, while Japan’s Nikkei slid 0.72%.
U.S. Treasury yields climbed, with the benchmark 10-year note yield rising 4.7 basis points to 4.485%. The 2-year yield, which closely tracks Federal Reserve rate expectations, jumped 7.7 basis points to 4.285%. The bond market reaction suggests investors believe the Fed may delay rate cuts.
Dollar Strengthens as Bitcoin Declines
The U.S. dollar gained ground in choppy trading, with the dollar index rising 0.36% to 108.05. The euro fell 0.51% to $1.0328, while the Japanese yen and British pound also weakened.
Bitcoin dropped 0.86% to $95,986.52, and Ethereum declined 3.73% to $2,607.61.
Oil Prices Rise, Gold Gains on Safe-Haven Demand
Crude oil prices climbed following new U.S. sanctions on Iranian exports. U.S. crude settled at $71.00 per barrel, while Brent rose to $74.66 per barrel.
Gold prices also moved higher as investors sought safety amid economic uncertainty. Spot gold increased 0.13% to $2,860.18 an ounce, while U.S. gold futures rose 0.26% to $2,863.50 an ounce.
With trade tensions escalating and economic data sending mixed signals, markets remain on edge as investors look ahead to further policy developments.