MARKET SNAPSHOT

U.S. stocks finished lower Friday and Treasury yields rose, with investors rattled after the White House said it would implement tariffs on Canada, Mexico and China over the weekend. Oil futures settled lower in cautious trade as the market waited to see whether President Trump's tariff package would include oil. Gold prices slipped from a record high as the dollar strengthened.

MARKET WRAPS

EQUITIES

Financial markets finished a bumpy month broadly higher, with everything from gold and government bonds to stocks at home and abroad notching gains despite escalating trade disputes, an uncertain path for interest rates and the DeepSeek AI shock.

Investors were rattled in the final hours of January trading when the White House said Friday afternoon that it would place tariffs starting Saturday on major trade partners Canada, Mexico and China.

Major U.S. stock indexes had been trading higher Friday morning after another solid batch of corporate earnings reports and economic data on personal spending met expectations. But they reversed course following the tariffs announcement.

The technology-heavy Nasdaq Composite, which had been up nearly 1.5%, ended 0.3% lower. The S&P 500 shed 0.5%. The Dow Jones Industrials Average dropped 0.8% on the day, dragged down by a 4.6% decline in shares of oil major Chevron.

Earlier Friday, Japan's Nikkei Stock Average ended 0.2% higher, tracking overnight gains on Wall Street and supported by technology stocks.

Stocks in Australia rose, as the S&P/ASX 200 Benchmark Index added 0.5% for its third consecutive day of increases.

New Zealand's NZX-50 added 0.5%, paring weekly declines amid strength in infrastructure stocks.

Markets in China were closed for the Lunar New Year celebrations.

COMMODITIES

Oil futures slipped as traders awaited a tariff decision by President Trump on crude imports from Canada and Mexico.

West Texas Intermediate crude for March delivery fell 0.3% to settle at $72.53 a barrel on the New York Mercantile Exchange. March Brent crude lost 0.1% to end at $76.76 a barrel on ICE Futures Europe.

"There is still significant uncertainty around whether President Trump will include oil in the tariff package, specifically on Canada," Alex Hodes, director of energy-market strategy at StoneX.

Gold prices slipped below Thursday's record close, but still notched their best month in dollar terms since August 2011.

Front month Comex gold for February delivery shed 0.4% to settle at $2812.50 per troy ounce.

TODAY'S TOP HEADLINES

Trump Slaps Tariffs on Mexico, Canada and China in Opening Salvo of Trade War

The White House on Saturday announced a wave of tariffs against Mexico, Canada and China, marking the first major levies of President Trump's second term and laying the groundwork for a continental trade war.

Effective Tuesday, the U.S. will impose a 25% levy on imports from Canada and Mexico, a 10% tariff on energy products from Canada, and an additional 10% tariff on China.

The tariffs will be imposed under emergency economic authority never before used for tariffs "because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl," Trump posted on his Truth Social platform.

Canada, Mexico Want America to Feel the Pain of Tariffs Too

Canada and Mexico prepared to retaliate over tariffs from President Trump, as the U.S. and its neighbors spiraled into a trade war that threatens to hurt American consumers and upend decades of economic integration.

The U.S.'s new 25% tariffs on all goods and 10% duties on energy products will inflict severe damage on America's neighbors to the north and south. The tariffs risk pushing the U.S.'s top trading partners into recession, as both nations send 80% of their exports to America. The Canadian dollar and the Mexican peso are likely to weaken against the U.S. dollar.

Their strategy is to make sure Americans feel the pain too. But they are likely to focus on what experts call precision strikes against U.S. exports from Republican strongholds and industry groups with political leverage in Washington.

PCE Inflation Accelerated in December

The measure of price increases targeted by the Federal Reserve sped up in December, reflecting a stubborn spell of inflation that remains modestly higher than the central bank's target.

The personal-consumption-expenditures price index rose by 0.3% last month, compared with 0.1% in November, contributing to a 2.6% increase over all of 2024.

Excluding volatile food and energy prices, the core version of the PCE price index rose by 0.2% last month, compared with 0.1% in November, and by 2.8% over the past 12 months. December was the third straight month that core PCE inflation stalled at 2.8%.

Fed's Bowman Skeptical That Central Bank Still Very Restrictive

Federal Reserve governor Michelle Bowman said Friday that she would prefer only gradual future easing of the central bank's interest-rate policy.

Speaking at a business conference in Portsmouth, N.H., Bowman said she still sees risks that inflation could take a higher path than forecast, and that she thinks easier financial conditions over the past year might have contributed to stalled progress.

"It seems unlikely that the overall level of interest rates and borrowing costs are exerting meaningful restraint," Bowman said, according to a published text of her remarks.

Meta in Talks to Reincorporate in Texas or Another State, Exit Delaware

First Mark Zuckerberg moved Meta's fact checkers to Texas. Now, he is exploring moving his social-media giant's legal residence to the Lone Star state.

Meta Platforms is discussing moving its incorporation from Delaware, where most big U.S. companies are legally housed, people familiar with the matter said. Texas has billed itself as a better destination for companies such as Meta with controlling shareholders like Zuckerberg. The paperwork change wouldn't relocate its corporate headquarters.

The company has talked to Texas officials about the possible changes, one of the people said. It has also considered reincorporating in other states, another person said.

Exxon, Chevron Yearly Profits Down as Investor Payouts Hit Fresh Highs

The annual profits of Exxon Mobil and Chevron fell in 2024, as anemic natural-gas prices and narrowed refining margins took a toll.

Despite the weaker results, the companies reported Friday that they pumped record amounts of oil and gas from certain oil fields and sent record payouts to investors last year.

Exxon and Chevron are still trying to strip out costs and use their cash to lure reluctant investors back to the oil sector. They face hot competition from tech giants and other industries for Wall Street's attention.

Expected Major Events for Monday

00:00/AUS: Jan Melbourne Institute Monthly Inflation Gauge

00:30/AUS: Dec Retail Trade

00:30/TAI: Jan Taiwan Manufacturing PMI

00:30/JPN: Jan Japan Manufacturing PMI

00:30/THA: Jan Thailand Manufacturing PMI

00:30/INA: Jan Indonesia Manufacturing PMI

00:30/PHI: Jan Philippines Manufacturing PMI

00:30/SKA: Jan South Korea Manufacturing PMI

00:30/MAL: Jan Malaysia Manufacturing PMI

00:30/AUS: Dec Building Approvals

00:30/AUS: Jan ANZ-Indeed Job Ads

01:45/CHN: Jan China Manufacturing PMI

04:00/INA: Jan CPI

05:00/JPN: Jan Auto sales

05:30/AUS: Jan Commodity Price Index

08:30/HK: 4Q Advance GDP

08:30/HK: Dec Retail Sales

13:00/SIN: Jan Singapore Purchasing Managers' Index $(PMI.UK)$

21:45/NZ: Dec Building Consents Issued

23:50/JPN: Jan Monetary Base

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

February 02, 2025 16:30 ET (21:30 GMT)

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