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.

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.

"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."

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.

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.

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.

"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."

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.