Trump will put in place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective Saturday. The White House provided no word on whether there would be any exemptions to the measures that could result in swift price increases to U.S. consumers.
The earlier gains on Wall Street had helped shave losses from the start of the week over worries that the artificial-intelligence boom may not require as much investment as thought. The S&P 500 is now on track for a weekly loss of 1%.
Apple reversed course from market leading gains to a loss of 1.5%. The company earlier reported stronger profit for the latest quarter than analysts expected. Wall Street's most valuable company, and thus the most influential on the S&P 500 and other indexes, said sales of its iPhone sales dipped. But revenue for its services businesses, such as AppleCare and its app store, rose to a record.
KLA, a supplier to the electronics industry initially rose after reporting profit and revenue that topped analysts' expectations, but then fell 0.8%. The company, which credited its results on expanding artificial-intelligence and high-performance computing investments, fell 6.3% on Monday. That's when tech stocks around the world tumbled, after a Chinese upstart, DeepSeek, said it developed a large language model capable of competing with the world's best, without having to use top-flight chips.
The disruption raised questions about whether all the investment expected for AI chips, data centers and electricity is really needed.
Shares of Nvidia, considered the poster child for the AI frenzy, fell 3.6%. They are down 15.7% for the week. Its CEO, Jensen Huang, is expected to meet with Trump Friday in Washington.
U.S. stocks also got some help Friday from a relatively calm bond market, where rising Treasury yields had been cranking up the pressure in recent months.
Treasury yields held relatively steady after an update on the measure of inflation that the Federal Reserve prefers to use came in almost exactly as economists expected. The yield on the 10-year Treasury rose to 4.58% from 4.52% late Thursday.
Yields have been generally climbing since September as the U.S. economy has remained much more solid than economists expected. More recently, worries about tariffs and other possible policies coming from President Donald Trump that could add upward pressure on inflation and the U.S. government’s debt have also sent yields higher.
The Fed left its benchmark interest rate unchanged as it closed out its most recent meeting Wednesday. The central bank is signaling a more cautious approach as it waits to see how policies under Trump will impact inflation and the broader economy. Higher tariffs and tax cuts could push inflation higher, while deregulation could possibly reduce it.
“Markets are on edge watching President Trump’s plans to raise tariffs and tighten immigration policies, since both are pressuring the Fed to keep interest rates elevated," said Bill Adams, chief economist for Comerica Bank.
On Wall Street, Walgreens Boots Alliance dropped 10.8% after suspending its dividend and breaking a streak of quarterly payouts to its shareholders that stretches back more than 90 years.
Exxon Mobil ticked down 2.8% even though the energy giant posted a stronger fourth quarter profit than Wall Street had forecast. Exxon credited increased production in the U.S. Permian basin and in Guyana for the strong results, but its revenue came in lower than expected.
In stock markets abroad, indexes ended mixed in Europe after finishing mixed in Asia.
Japan’s Nikkei 225 index added 0.1% after a report showed that the country’s core inflation rate topped the central bank’s 2% target, paving the way for further hikes to interest rates.
The Kospi in South Korea fell 0.8% after trading resumed their following holidays. Markets remained closed in Hong Kong and Shanghai for the Lunar New Year.
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AP Business Writer Alex Veiga contributed.
Credit: AP
Credit: AP
Credit: AP
Credit: AP
Credit: AP
Credit: AP