Markets News, January 31, 2025: Stocks Slip as White House Says Tariffs Coming Saturday; Major Indexes Post Gains for January

 

Timothy A. Clary / AFP / Getty Images

Major indexes closed lower Friday as stocks retreated late in the session after the White House said tariffs on Mexico, Canada and China will take effect Saturday.

The S&P 500 and Nasdaq Composite fell 0.5% and 0.3%, respectively, while the Dow Jones Industrial Average shed 0.8%. The major indexes managed to post gains for the month, despite a roller-coaster last week of trading fueled by corporate results, the Federal Reserve's latest decision on interest rates and the revelation that Chinese startup DeepSeek had launched a highly effective, low-cost AI model.

White House press secretary Karoline Leavitt  told reporters Friday afternoon that the Trump administration will impose 25% tariffs on Mexico and Canada, and a 10% rate on China. The news appears to end a period of doubt over whether President Donald Trump would follow through on his campaign promise of wide-ranging tariffs. Investors worry that the tariffs could take a heavy toll on certain industries, while potentially spurring inflation.

Major indexes had spent much of Friday in positive territory as investors digested a barrage of earnings reports and a benign reading on a closely followed inflation indicator.

Shares of major technology companies, which endured an especially volatile week, closed mostly higher, with two notable exceptions. Apple (AAPL) fell 0.7% despite reporting better-than-expected earnings, while AI chipmaker Nvidia (NVDA), which has been particularly hard hit in the wake of the DeepSeek news, slid 3.7%. Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Tesla (TSLA) and Broadcom (AVGO) gained ground.

Among noteworthy post-earnings movers, Intel (INTC) shares slumped nearly 3% after the beleaguered chipmaker reported a narrower-than-expected loss for the fourth quarter but issued a disappointing outlook. Atlassian (TEAM) shares soared 15% after the software company issued an upbeat  revenue outlook amid robust demand for its AI products. Pharmaceutical giant AbbVie (ABBV) rose nearly 6% after releasing strong earnings, while oil majors Exxon Mobil (XOM) and Chevron (CVX) retreated 2.5% and 4.6%, respectively.

On the economic data front, the Personal Consumption Expenditures index, which is the Fed's preferred inflation gauge, showed that inflation accelerated in December, though the number was in line with economists' expectations. The Fed earlier this week opted to leave its influential fed funds rate unchanged, after having cut it by a full percentage point since September, as the economy has continued to show strength and inflation remains stubborn.

The yield on the 10-year Treasury, which is correlated with expectations about where interest rates are headed, was at 4.54% in recent trading, up from 4.51% at yesterday's close. The yield jumped as high as 4.58% after the news on tariffs.

Bitcoin was at $102,000, down from an earlier high of $106,000. Gold futures were down 0.5% at around $2,830 an ounce after hitting a new record high of $2,860 this morning, while WTI crude oil futures rose 1.5%.