- Stocks, Commodity Currencies Drop on Tariff Fears: Markets Wrap
President Donald Trump’s pledge to impose tariffs on all imports of steel and aluminum pushed commodity
currencies and Asian equities lower as markets remained jittery about trade tensions. Hong Kong stocks were
an outlier. The Australian and Canadian dollars, and the Norwegian krone, all weakened following Trump’s
comments. A benchmark of Asian equities fell for the first time in a week, and regional currencies also
slipped. India’s rupee declined to a record low. Trump’s intention to announce a 25% levy on steel and
aluminum Monday added to already tense sentiment before Federal Reserve Chair Jerome Powell’s
semiannual congressional testimony and the US President’s possible unveiling of reciprocal tariffs on
“everyone” this week. Trump said the metals tariffs would apply to imports from all countries, though he
didn’t specify when they would take effect. - Dow closes 400 points lower Friday as inflation and tariff fears spur a sell-off
Stocks slid on Friday as a mix of news related to tariffs and inflation worried traders to close out the week.
Major benchmarks took a leg lower during the session after President Donald Trump said he was planning
reciprocal tariffs on trading partners. This could mean raising tariff levels across the board to equal rates
charged to the U.S. 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 on the week. - Oil ticks higher as investors weigh new U.S. tariffs
Oil prices ticked higher on Monday even as investors weighed U.S. President Donald Trump’s latest tariff
threat, this time on all steel and aluminum imports, which could dampen global economic growth and energy
demand. Brent crude futures climbed 40 cents, or 0.5%, to $75.06 a barrel by 0133 GMT while U.S. West
Texas Intermediate crude was at $71.38 a barrel, up 38 cents, or 0.5%. The market posted its third
consecutive weekly decline last week on concerns about a global trade war. Trump said he will announce on
Monday 25% tariffs on all steel and aluminum imports into the U.S. in another major escalation of his trade
policy overhaul. Just a week ago, the president announced tariffs on Canada, Mexico and China, but
suspended those for its neighboring countries the next day. In light of Trump’s temporary backdown last
week, investors appeared to be shrugging off the steel and aluminum tariff threat for now, Tony Sycamore, a
Sydney-based analyst at IG said. - Gold hovers near all-time highs as Trump’s tariff threats lift safe-haven demand
Gold prices firmed on Monday, and hovered near a record high hit in the previous session, as investors
sought refuge in the safe-haven asset after U.S. President Donald Trump’s decision to impose fresh tariffs
sparked concerns of a global trade war. Spot gold was up 0.3% at $2,868.66 per ounce, as of 0005 GMT, after
hitting a record high of $2,886.62 on Friday. U.S. gold futures rose 0.2% to $2,894.00. Trump said during the
weekend that he will announce new 25% tariffs on Monday on all steel and aluminum imports into the U.S.,
which would come on top of existing metals duties in another major escalation of his trade policy overhaul.
Trump also said he plans to announce reciprocal tariffs on many countries by Monday or Tuesday of next
week. - China Consumer Inflation Picks Up as Holiday Boosts Spending
China’s consumer inflation accelerated for the first time since August, caused by a burst of household
spending around the Lunar New Year holiday even as deflationary pressures persist. The consumer price
index rose 0.5% in January from a year earlier, the National Bureau of Statistics said Sunday, compared with a
0.1% gain in the previous month. The median forecast of economists surveyed by Bloomberg was a 0.4%
increase. A temporary spending boom during the eight-day break briefly masked the extent of the
deflationary challenge facing the world’s second-biggest economy. The price of services increased 0.9%,
accounting for more than 50% of the total rise in CPI, according to the statistics bureau. The CPI jump was
“mainly due to higher food prices and tourism-related services prices on an earlier-than-usual Lunar New
Year holiday,” Goldman Sachs Group Inc. analysts wrote in a note. “But the boost is likely to become a drag in
February as seasonal demand fades.” China’s factory deflation extended into a 28th month with a 2.3%
decline, flat with the index’s contraction in December. Analysts at Nomura Holdings Inc. including Sonal
Varma and Si Ying Toh estimate that China’s CPI could have been distorted by around 0.4 percentage point
last month, as some prices gained when consumers ramped up purchases ahead of the festival that ran from
Jan. 28 to Feb. 4 this year. - Trump to announce 25% steel and aluminum tariffs in latest trade escalation
U.S. President Donald Trump said on Sunday he will introduce new 25% tariffs on all steel and aluminum
imports into the U.S., on top of existing metals duties, in another major escalation of his trade policy
overhaul. Trump, speaking to reporters on Air Force One on his way to the NFL Super Bowl in New Orleans,
said he will announce the new metals tariffs on Monday. He also said he will announce reciprocal tariffs on
Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the
tariff rates levied by each country. “And very simply, it’s, if they charge us, we charge them,” Trump said of
the reciprocal tariff plan. The largest sources of U.S. steel imports are Canada, Brazil and Mexico, followed by
South Korea and Vietnam, according to government and American Iron and Steel Institute data. By a large
margin, hydropower-rich Canada is the largest supplier of primary aluminum metal to the U.S., accounting for
79% of total imports in the first 11 months of 2024. “Canadian steel and aluminum support key industries in
the U.S. from defense, shipbuilding and auto,” Canadian Innovation Minister Francois-Philippe Champagne
posted on X. “We will continue to stand up for Canada, our workers, and our industries.” Trump also said that
while the U.S. government would allow Japan’s Nippon Steel to invest in U.S. Steel, it would not allow this to
become a majority stake. “Tariffs are going to make it very successful again, and I think it has good
management,” Trump said of U.S. Steel. - Russia’s Baltic neighbors are breaking away from its power grid — and they’re braced for retaliation
The Baltic counties of Lithuania, Latvia and Estonia are bracing themselves for possible cyberattacks this
weekend as they complete their long-awaited decoupling from Russia’s power grid. The states fully
disconnected from the Moscow-controlled “BRELL” electricity network on Saturday, and are due to complete
their connection to the European electricity system on Sunday. “Russia may attempt to exploit this period to
create uncertainty,” Gert Auväärt, head of Estonia’s Cyber Security Centre, told CNBC. - U.S. economy adds 143,000 jobs in January, less than anticipated
The U.S. economy added fewer jobs than anticipated in January, pointing to a slowing in labor demand,
although analysts noted the figures may be distorted by revisions and extreme weather events during the
month. Nonfarm payrolls came in at 143,000 in January, down from an upwardly-revised level of 307,000 in
December, according to data from the Labor Department’s Bureau of Labor Statistics (BLS). Economists had
seen the number at 169,000. Coupled with a similar increase in November’s revised figure, the total revisions
between the two months amounted to 100,000 roles. Meanwhile, the unemployment rate cooled slightly to
4.0%, down from 4.1% in the previous month. The figure was tipped to match December’s pace. Average
hourly earnings growth accelerated to 0.5%, faster than expectations that it would equal 0.3% in December.
The BLS flagged that the establishment survey — which measures nonfarm employment — had been revised
as a result of an annual benchmarking process and an update to seasonal adjustment factors. The household
survey for January, a gauge of status of the labor force, was also reflective of fresh population estimates, the
BLS said. Prior to the publication of the report, analysts had said the data could have been distorted by recent
devastating wildfires in Los Angeles, along with a spell of cold weather across the U.S. last month. However,
the BLS said the events had “no discernable effect” on the report. Friday’s figures, as well as a raft of separate
reports earlier this week, have suggested that the labor market may be easing but is not entering a sudden
downturn — possibly bolstering the case for the Federal Reserve to leave interest rates unchanged until at
least June. - How Chinese EVs are ramping up competition: No down payment and 5-year interest-free loans
Electric car companies in China welcomed the Year of the Snake with several incentives, after major
automakers reported a drop in deliveries at the start the year. On Wednesday, the first post-holiday official
working day, Tesla announced an 8,000 yuan insurance plan subsidy and five-year 0% interest financing plan
for its cheapest car, the Model 3. Chinese startup Xpeng on Wednesday did away with the down payment
completely in its interest-free financing deal for four models, and claimed in a social media hashtag that it
was the only automaker to do so. - Nike fell 4.3% after Citi downgraded the stock to neutral from buy, citing challenges facing the sneaker
maker
“We attended a sell-side event to meet with new CEO Elliott Hill,” analyst Paul Lejuez wrote. “After discussing
the key building blocks and challenges to achieve a turnaround, we no longer believe [fiscal 2026] will inflect
the way we hoped, either on the sales or [earnings before interest and taxes] margin line.” “Topline pressures
seem likely to continue as they manage down key franchises further in [fiscal 2026], without enough new
product at scale to fill the void,” Lejuez wrote. “Nike will continue to manage down the same 3 key franchises
that have been weighing on topline in fiscal 2025,” he added, highlighting Nike’s Air Jordan 1, Air Force 1 and
Dunk shoes. Citi believes that fiscal 2026 consensus estimates are too high. This, Lejeuz said, is “making the
turnaround timing much less visible, and we no longer have the patience or conviction to wait another year.” - Cloudflare shares surged 17.8% after the company announced fourth-quarter revenue that beat
expectations
Revenue for the quarter ending Dec. 31 increased 27% to about $460 million, ahead of analysts’ estimate for
$452.3 million. Cloudflare’s fourth-quarter earnings per share of 19 cents narrowly beat the analyst
consensus estimate of 18 cents. The confidence buoys hopes that the cybersecurity firm’s internal push to
target larger clients is starting to take hold. “We had a very strong end of 2024,” Chief Executive
Officer Matthew Prince said. “We saw record growth in our largest customers, those that spend more than
$1 million with Cloudflare per year — closing the year with 173. We added 55 of those customers in 2024,
and more than half of these new additions came in during fourth quarter alone.” Still, the company’s report
was tempered by first-quarter sales forecast of $468 million to $469 million, short of analysts’ estimate of
$475.2 million. The full year revenue forecast for 2025 of $2.09 billion matched expectations. - Amazon Stock Slides Friday Amid Concerns About AI Spending, Soft Forecast
Amazon shares dropped Friday after the tech giant said it plans to spend over $100 billion this year to
support its AI goals and offered a softer-than-expected sales forecast. Analysts have remained largely bullish
about the stock’s upward trajectory, but some cut their price targets in the wake of Thursday’s earnings call.
Shares of Amazon dropped about 4% Friday, though even with Friday’s losses, they’ve gained nearly a third of
their value over the past 12 months. - Uber stock jumps 7% after Bill Ackman reveals $2.3 billion stake
Bill Ackman thinks Uber shares are a bargain. The billionaire activist investor and CEO of Pershing Square
Holdings revealed Friday that his firm has built a significant position in the rideshare giant, causing the
stock to jump nearly 7%. In a post on X, Ackman said Pershing Square owns 30.3 million Uber shares, worth
about $2.3 billion based on the current stock price of roughly $75, which the firm began acquiring in early
January. He also said that he has been a long-term customer and admirer of the company since actor Edward
Norton introduced him to the app in its early days, prompting Ackman to become a “day one investor”
through a venture fund. Now, Ackman believes the company’s stock is available on the cheap. Uber shares
gained just 3% in 2024, trailing the S&P’s 25% gain, amid worries about the threat of autonomous vehicles as
Waymo and Tesla rush to develop robotaxi fleets. Over the last two years, however, Uber and Waymo have
announced partnerships to bring driverless ridesharing to Phoenix, Austin, and Atlanta, suggesting such
vehicles are not necessarily a death knell for the business. “We believe that Uber is one of the best-managed
and highest-quality businesses in the world,” Ackman said. “Remarkably, it can still be purchased at a massive
discount to its intrinsic value. This favorable combination of attributes is extremely rare, particularly for a
large-cap company.” - AMD’s Stock Slump Shows There’s No Silver Medal in AI
Regarded as the biggest competitor to Nvidia Corp. in making chips used to train artificial intelligence
software, Advanced Micro Devices Inc.’s shares look less like an immediate rival. The stock is mired at the
lowest level since November 2023, down more than 25% since the end of that year. The Philadelphia Stock
Exchange Semiconductor Index is up more than 20% over that time, while Nvidia has soared 160%. AMD fell
0.9% on Friday. In a break from recent quarters, the firm led by Chief Executive Officer Lisa Su refrained from
giving an annual forecast for its key AI accelerator product in its latest results this week. “If you were looking
for a catalyst for the next six months, she didn’t give it to you,” said Ted Mortonson, managing director at
Robert W Baird & Co., referring to Su. “For people with large positions wanting a stronger story for the first
half of 2025, this was a dead-money call.” The company’s failure to elaborate on generative AI revenue —
after having previously done so — is a concern that “Nvidia is just so far ahead of everyone else and has
these huge advantages, which means there could be issues in terms of adoption for AMD chips,” Mortonson
added. The report featured some bright spots, including better-than-expected revenue and a positive overall
forecast. However, Su said she expects sales of AI accelerator chips in the first six months of 2025 to be about
the same as they were in the second half of 2024. While things could change after AMD brings out a new chip
around the middle of the year, the trend stood out to investors who’ve bet on linear growth in a market that
she and her counterparts have said is set to expand for the next few years. The disappointment underlined
concerns about AMD’s ability to compete at a time when Chinese AI startup DeepSeek — which recently
rocked markets by claiming strong performance with lower costs and fewer chips — has scrambled
calculations for how much more money should be dedicated to AI infrastructure. Citi lowered its view on
AMD in the wake of the earnings report, citing the lack of an AI revenue guidance and seeing “both downside
risk to estimates and a lower multiple given slowing AI growth and margin dilution.”
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