U.S. Stock Markets Decline Amid Trade Tensions and Economic Data

By Abigail Summerville and Shashwat Chauhan
(Reuters) – All three U.S. stock indexes closed lower on Friday after President Donald Trump announced plans for reciprocal tariffs on several countries next week, following weak jobs and consumer sentiment data.

Trump did not specify which countries would be affected, indicating it would be a broad initiative aimed at addressing U.S. budget issues.

> “Today, the tone was set early with the payroll report, and very quickly people ignored that as soon as tariff conversations started coming back in,” said Mark Hackett, chief market strategist at Nationwide.

Markets had a poor start to the week after Trump announced sweeping trade tariffs over the weekend, though he suspended levies on goods from Mexico and Canada on Monday for a month. However, strong earnings reports in recent days partially mitigated the weak opening.

Earlier, a survey revealed U.S. consumer sentiment unexpectedly dropped in February to a seven-month low, with inflation expectations climbing sharply. Households now anticipate inflation at 4.3% over the next year, the highest since November 2023.

Another report indicated U.S. job growth slowed more than predicted in January after substantial gains in the prior months, although a 4% unemployment rate may provide the Fed cover to postpone interest rate cuts, likely at least until June.

The final employment report under former President Joe Biden showed 598,000 fewer jobs were created in the 12 months ending March than previously estimated. However, the final payrolls benchmark revision was less drastic than the earlier estimate of 818,000 job losses in August.

The Dow Jones Industrial Average fell 444.23 points, or 0.99%, to 44,303.40. The S&P 500 lost 57.58 points, or 0.95%, to 6,025.99, while the Nasdaq Composite dropped 268.59 points, or 1.36%, to 19,523.40.

All three indexes finished lower for the week, with the Dow ending a three-week streak of gains, down 0.54%. The S&P dropped 0.24% and the Nasdaq fell 0.53%.

All 11 S&P 500 sectors saw losses on Friday, with consumer discretionary leading the decline at approximately 2.5%.

• Uber (NYSE:UBER) surged 6.6% after billionaire hedge fund manager Bill Ackman revealed a large stake in the company.
• Amazon.com (NASDAQ:AMZN) fell 4.1% due to underperformance in its cloud computing unit, Amazon Web Services, and lower-than-expected forecasts for first-quarter revenue and profit.

The Cboe Volatility Index, often referred to as Wall Street’s fear gauge, increased by 6.6% on Friday, reaching 16.3.

Traders in short-term interest-rate futures now predict the Fed will cut interest rates only once this year, moving away from earlier expectations of two cuts starting in June.

In other notable movements, Expedia (NASDAQ:EXPE) surged 17.3% following better-than-expected fourth-quarter results, while Elf Beauty plummeted 19.6% after the cosmetics firm lowered its annual net sales and profit projections.

Declining issues surpassed advancing ones by a 2.79-to-1 ratio on the NYSE, resulting in 162 new highs and 104 new lows. On the Nasdaq, 1,241 stocks advanced while 3,145 declined, marking a 2.53-to-1 ratio.

The total volume on U.S. exchanges reached 15.06 billion shares, slightly higher than the 14.91 billion average over the previous 20 trading days.