Stock market today: Wall Street surrenders gains after White House confirms Trump tariff move

[February 01, 2025]  By STAN CHOE and DAMIAN J. TROISE

Stocks on Wall Street surrendered early gains and closed broadly lower Friday after the White House said President Donald Trump would impose promised tariffs on key U.S. trading partners.

The S&P 500 fell 0.5% and the Nasdaq composite dropped 0.3%. The indexes, which had posted solid gains in morning trading, posted their first weekly loss in three weeks.

The Dow Jones Industrial Average fell 0.8%.

Trump will put in place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective Saturday. The White House provided no word on whether there would be any exemptions to the measures that could result in swift price increases to U.S. consumers.

The selling was broad, with about 75% of the stocks in the S&P 500 closing lower. Technology and energy companies accounted for a large share of the decline.

“If Trump says it’s something that could happen by tomorrow that doesn’t leave a lot of room to move,” said Sam Stovall, chief investment strategist at CFRA. “There’s just so much uncertainty associated with elevating tariffs on our three major trading partners.”

The earlier gains on Wall Street had helped shave losses from the start of the week over worries that the artificial-intelligence boom may not require as much investment as thought.

Apple reversed course from market leading gains to a loss of 0.7%. The company had reported stronger profit for the latest quarter than analysts expected. Wall Street’s most valuable company, and thus the most influential on the S&P 500 and other indexes, said sales of iPhones dipped. But revenue for its services businesses, such as AppleCare and its app store, rose to a record.

KLA, a supplier to the electronics industry initially rose after reporting profit and revenue that topped analysts’ expectations, but then closed down 0.6%. The company, which credited its results on expanding artificial-intelligence and high-performance computing investments, fell 6.3% on Monday. That’s when tech stocks around the world tumbled, after a Chinese upstart, DeepSeek, said it developed a large language model capable of competing with the world’s best, without having to use top-flight chips.

The disruption raised questions about whether all the investment expected for AI chips, data centers and electricity is really needed.

Shares of Nvidia, considered the poster child for the AI frenzy, fell 3.7%. They dropped 15.8% for the week. Its CEO, Jensen Huang, was expected to meet with Trump Friday in Washington.

Worries that tariffs could end up driving inflation higher helped push long-term bond yields higher, including the 10-year Treasury, which rose to 4.54% from 4.52% late Thursday.

Traders work on the floor at the New York Stock Exchange in New York, Wednesday, Jan. 29, 2025. (AP Photo/Seth Wenig)

“It’s not the safe haven that it normally is because these tariffs might result in higher inflation and the need for the Fed to remain on pause for longer or to reverse course and raise rates,” Stovall said.

Shorter-term U.S. government bond yields mostly fell.

Yields have been generally climbing since September as the U.S. economy has remained much more solid than economists expected. More recently, worries about tariffs and other possible Trump administration policies that could add upward pressure on inflation and the U.S. government’s debt have also sent yields higher.

The Federal Reserve left its benchmark interest rate unchanged as it closed out its most recent meeting Wednesday. The central bank is signaling a more cautious approach as it waits to see how policies under Trump will impact inflation and the broader economy. Higher tariffs and tax cuts could push inflation higher, while deregulation could possibly reduce it.

“Markets are on edge watching President Trump’s plans to raise tariffs and tighten immigration policies, since both are pressuring the Fed to keep interest rates elevated," said Bill Adams, chief economist for Comerica Bank.

On Wall Street, Walgreens Boots Alliance dropped 10.3% after suspending its dividend and breaking a streak of quarterly payouts to its shareholders that stretches back more than 90 years.

Exxon Mobil ticked down 2.5% even though the energy giant posted a stronger fourth quarter profit than Wall Street had forecast. Exxon credited increased production in the U.S. Permian basin and in Guyana for the strong results, but its revenue came in lower than expected.

All told, the S&P 500 fell 30.64 points to 6,040.53. The Dow dropped 337.47 points to 44,544.66. The Nasdaq lost 54.31 points to close at 19,627.44.

In stock markets abroad, indexes ended mixed in Europe after also finishing mixed in Asia.

Japan’s Nikkei 225 index added 0.1% after a report showed that the country’s core inflation rate topped the central bank’s 2% target, paving the way for further hikes to interest rates.

The Kospi in South Korea fell 0.8% after trading resumed there following holidays. Markets remained closed in Hong Kong and Shanghai for the Lunar New Year.

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AP Business Writer Alex Veiga contributed.

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