Weekly Market Wrap-Up: Tariffs, Tech Volatility & January Gains
?? Market Recap: A Rough End to a Positive Month
S&P 500: ?? -0.5% to 6,040.53
Nasdaq: ?? -0.3% to 19,627.44
Dow Jones: ?? -0.8% to 44,544.66
10-Year Treasury Yield: ?? +2bps to 4.54%
Dollar Index: ?? Strongest week since November
Despite Friday’s losses, January ended with gains across major indices:
? S&P 500: +2.7% YTD ? Dow: +4.7% YTD ? Nasdaq: +1.6% YTD
?? Tariffs Shake Up the Market
The market was trading well in the morning, but stocks plummeted in the afternoon after the White House confirmed that Trump’s 25% tariffs on Mexico & Canada and 10% tariffs on China will begin Saturday (Feb. 1).
Trump also hinted at future tariffs on steel, aluminum, oil, gas, pharmaceuticals, and semiconductors.
Markets initially recovered mid-week on speculation the tariffs might be delayed, but Friday's confirmation spooked investors.
?? Goldman Sachs’ Take: The 25% blanket tariff is likely short-lived and could be lifted if the U.S. reaches a border policy agreement with Canada & Mexico.
?? Inflation & Economic Data: Fed’s Preferred Inflation Gauge Holds Steady
Core PCE Price Index (Fed's key inflation gauge):+0.2% MoM (in-line) +2.8% YoY (unchanged from last month)
Chicago PMI: 39.5 (missed expectations of 40.3)
Personal Spending: +0.7% MoM (stronger than expected)
Employment Cost Index: +0.9% (wage growth moderating)
?? Market Takeaway:
Inflation is still sticky above the Fed’s 2% target—explaining why Powell signaled no rush to cut rates.
Bond yields ticked higher (4.54% for 10-year, 4.21% for 2-year), weighing on stocks.
?? Tech Volatility: DeepSeek Sparks AI Selloff
The week started with AI panic as Chinese startup DeepSeek rattled tech stocks by revealing an AI model that challenges NVIDIA (NVDA) and other U.S. giants.
Nvidia (NVDA) and AI stocks tumbled early in the week, leading to a $784B market cap loss on Monday.
Despite the scare, big tech rebounded, but DeepSeek remains a wildcard.
?? Investor Sentiment: While DeepSeek’s technology is impressive, many analysts view it as an "evolutionary" rather than "revolutionary" AI breakthrough—meaning the AI boom is far from over.
?? Earnings Highlights: Winners & Losers
?? Winning Stocks:
Atlassian (TEAM) ?? +15% after reaffirming its $10B revenue target.
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AbbVie (ABBV) ?? +4.7% on solid earnings.
Apple (AAPL) ?? rose initially but closed -0.8% lower.
?? Struggling Stocks:
Chevron (CVX) -4.6% ? First quarterly refining business loss since 2020.
Intel (INTC) -3.1% ? Weak revenue forecast.
ExxonMobil (XOM) -2.5% ? Despite beating EPS, refining weakness hurt.
Colgate-Palmolive (CL) -4.6% ? Weak consumer demand.
?? Market Outlook: Key Themes to Watch in February
1?? ?? Tariff Fallout
Will Mexico & Canada retaliate?
How will corporate earnings adjust to these supply chain disruptions?
How will inflation react if tariffs increase consumer prices?
2?? ?? AI & Tech Rebound?
Nvidia (NVDA), AMD (AMD), and Alphabet (GOOGL) report earnings next week—key test for the AI rally.
Can DeepSeek sustain competitive pressure?
3?? ?? Key Economic Data Next Week
Monday: ISM Manufacturing PMI
Tuesday: JOLTS Job Openings
Friday: Non-Farm Payrolls Report & Unemployment Rate
?? Final Take: What’s Next?
? Bullish Case:
AI-driven market rally should continue unless DeepSeek sparks another selloff.
Big tech earnings (GOOGL, AMZN, NVDA) could push markets higher.
Fed remains patient on rate cuts, supporting equities.
? Bearish Risks:
Tariffs create uncertainty—potential for inflationary pressures.
China's retaliation? Could hit tech supply chains.
Bond yields rising could pressure growth stocks.
?? Bottom Line: The first month of 2025 ended on a shaky note, but as long as tech earnings hold up and tariff risks don’t spiral, the rally isn’t over.
?? Next Week: Eyes on Amazon, Nvidia, and the jobs report!
?? That’s your Weekly Wrap-Up! What’s your next move? ????