U.S. stocks closed lower on Friday after the White House announced that President Donald Trump would impose stiff 25% tariffs on Canadian and Mexican goods and a 10% tariff on Chinese goods on Saturday, sparking fears of another trade war. All three major indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) declined 0.8% or 337.47 points, to end at 44,544.66 points.
The S&P 500 lost 0.5% or 30.64 points, to finish at 6,040.53 points. Energy, consumer staples, and materials stocks were the worst performers.
The Energy Select Sector SPDR (XLE) dropped 2.8%, while the Materials Sector SPDR (XLB) fell 0.7%. The Consumer Staples Select Sector SPDR (XLP) declined 0.9% each. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.3% or 54.31 points to close at 19,627.44 points.
The fear-gauge CBOE Volatility Index (VIX) was up 3.72% to 16.43. Decliners outnumbered advancers on the NYSE by a 2.3-to-1 ratio. On the Nasdaq, a 1.95-to-1 ratio favored declining issues. A total of 15.78 billion shares were traded on Friday, lower than the last 20-session average of 15.5 billion.
Investors were already bracing for Trump to impose sharp tariffs on some of the nation’s biggest trading partners. On Friday, the White House finally announced that it would impose 25% tariffs on Canadian and Mexican goods and 10% on Chinese imports from Saturday.
Following the announcement concerns grew that Trump’s decision could spark another trade war as Mexico, Canada and China would also announce retaliatory tariffs. Investors’ confidence took a hit after that. The Dow which had risen over 170 points at its session’s high, gave up all the gains to end sharply lower for the day.
The S&P 500 and Nasdaq also finished in the red, with stocks exposed to these markets suffering the most. Shares of Chipotle Mexican Grill, Inc. (CMG) fell 1.1%, while Constellation Brands, Inc. (STZ) lost 1.9%. Chipotle Mexican Grill has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors also digested earnings reports from a bunch of big tech names. Shares of Apple, Inc. (AAPL) ended 0.7% lower after the company reported disappointing iPhone sales in its last quarter. However, the company beat both earnings and revenue expectations.
Apple reported first-quarter fiscal 2025 earnings of $2.40 per share, beating the Zacks Consensus Estimate of $2.36 per share. The company posted revenues of $124.3 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.24%.
Shares of Visa Inc. (V) also finished 0.4% lower despite the company beating on both earnings and revenues. Visa reported first-quarter fiscal 2025 earnings of $2.75 per share, beating the Zacks Consensus Estimate of $2.66 per share. The company reported revenues of $9.51 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.82%.
The Commerce Department reported on Friday that the personal consumption expenditure (PCE) index, the Fed’s preferred inflation gauge, rose 0.3% sequentially in December and 2.6% from year-ago levels. Core PCE, which excludes food and energy, rose 2.8% year over year and 0.2% sequentially in December.
Personal income rose 0.4% in December after increasing 0.3% in the prior month. Consumer spending jumped a solid 0.7% month over month in December after an upwardly revised 0.6% in November.
It was a volatile week that saw stocks plummeting at the beginning of the week amid fears of an artificial intelligence bubble bursting following the debut of a low-cost Chinese AI model, DeepSeek. However, stocks rebounded after that but the volatility continued.
For the week, the Dow ended up 0.3%. However, the S&P 500 lost 1% and the Nasdaq ended 1.6% lower.
It was an eventful January that saw Trump returning to the White House for his second term. Trump’s return also gave a boost to markets but overall, it was a volatile January although all major indexes registered gains for the month.
The Dow gained 4.7% for the month while the S&P 500 was up 2.7%. The Nasdaq gained 1.6% for the month.
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