Stocks Slip on Tariff and Inflation Fears

New York, NY – Stocks slid on Friday as investors grappled with news related to tariffs and inflation, ending a volatile week in negative territory. Major benchmarks took a dip during the session after President Trump announced plans to impose reciprocal tariffs on trading partners, potentially raising tariff levels across the board.

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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% to end at 19,523.40. Friday’s losses left the major averages in negative territory for the week.

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"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. "We’ll have a news conference, and we’ll lay it out pretty simple."

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The stock market had already been on edge before Trump’s comments. Earlier consumer sentiment and jobs data pointed to a pick-up in inflation and spiked the 10-year Treasury yield above 4.5% at its session high. Consumer sentiment, according to a preliminary reading of the University of Michigan’s consumer sentiment index, came in at 70.4. Economists polled by Dow Jones had expected 71.3.

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But perhaps more concerning was that the report’s respondents anticipate the one-year inflation rate to hit 4.3%, marking a rise of one percentage point from the previous month and its highest level since November 2023. Also released on Friday, January’s jobs report showed the unemployment rate fell to 4% from 4.1%, and that average hourly earnings last month were higher than expected.

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Shares of lost 4% after guidance from the e-commerce giant disappointed investors. The company called for revenue growth of 5% to 9% in the first quarter — its lowest outlook in years. The outlook overshadowed top- and bottom-line beats in the fourth quarter. continued to fall following somewhat disappointing results earlier in the week.

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"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. "I don’t think that we’re heading for a bear market but rather just probably heading for some volatility and short-term disappointment."

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It’s been a volatile week. Stocks fell on Monday after President Trump, over the weekend, announced 10% tariffs on China. 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. Correction: An earlier version misstated the session high for the 10-year Treasury yield.