US stocks tumbled on Friday, driven by investor concerns over potential new tariffs from the Trump administration. This news, coupled with rising consumer inflation expectations and a weaker-than-expected jobs report, sent the Dow Jones Industrial Average plummeting over 400 points, its worst daily performance in a month. The S&P 500 and the tech-heavy Nasdaq Composite also experienced significant losses, declining nearly 1% and 1.4% respectively, marking their second consecutive week of declines.
President Trump’s announcement of forthcoming reciprocal tariffs on American imports further fueled the market’s downward spiral. His remarks during a meeting with Japanese Prime Minister Shigeru Ishiba, which included the possibility of tariffs on Japan, amplified investor anxiety.
Consumer sentiment plummeted to a seven-month low in early February, falling short of forecasts. Inflation expectations surged amid growing unease over the potential impact of Trump’s tariff threats.
The University of Michigan’s survey revealed that Americans now anticipate a 4.3% inflation rate over the next year, a full percentage point higher than the previous month’s projection. This sharp increase reflects the growing concern over the potential inflationary consequences of new tariffs.
The 10-year Treasury yield climbed to a session high of 4.5% following the release of the consumer sentiment data and the monthly jobs report. The January jobs report indicated the US economy added 143,000 jobs, missing economist expectations. While the labor market demonstrated continued resilience, with unemployment dipping to 4.0% from December’s 4.1%, the overall report failed to inspire investor confidence.
Adding to the market’s woes, Amazon stock plunged 4% after the e-commerce giant, along with Google and other AI-focused tech companies, issued disappointing revenue forecasts. This news further dampened investor sentiment and contributed to the broad market sell-off.
