US benchmark indices on Wall Street fell off the highs of the day after the White House announced that there will be no let up in the February 1 deadline of President Donald Trump to impose tariffs on Canada, Mexico and China, contrary to earlier reports of them being imposed on March 1 instead of Saturday.CompanyValueChange%ChangeThe Dow Jones fell 450 points from the highs to end below the 45,000 mark, while the Nasdaq fell nearly 350 points from its session’s high. The S&P 500 ended 0.5% lower, but managed to hold on to the 6,000 mark.White House Press Secretary Karoline Leavitt announced on Friday afternoon that the tariffs will be available for public inspection “at some point” on Saturday. Trump has threatened a 25% tariff each on Canada and Mexico, along with a 10% tariff on China. There was also denial of an earlier news report of a delayed implementation.
Speaking on Friday, the US president said he would impose tariffs on a wide range of imports in the coming months, including on steel, aluminum, oil and gas, pharmaceuticals, as well as semiconductors — ramping up his threats to hit trading partners with new levies. He also said that the US would “be doing something very substantial” with tariffs targeting the European Union.“We’ve cited the potential for volatility surrounding tariffs, and today we saw it play out in the markets,” said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team. “As was the case for Monday’s AI news, it remains to be seen how the markets will absorb this development on a longer-term basis.”Skelly also noted that there are still many unanswered questions, and the picture could look very different in the coming days.“Overall, though, this week has been a reminder of how unexpected events can quickly shift market perceptions,” he said.
The Bloomberg Dollar Spot Index rose 0.4%. The yield on 10-year Treasuries advanced two basis points to 4.54%.What’s interesting is in the 10 days since Trump’s initial tariff threat on Jan. 21, the S&P 500 Index is essentially flat while equity benchmarks in Europe, Canada and Mexico are all higher, and the Nasdaq Golden Dragon Index, which is comprised of companies that do business in China but trade in the US, has jumped more than 4%.US big tech stocks are set to become the “Lagnificent 7” this year, Bank of America Corp.’s Michael Hartnett warned — suggesting investors should buy cheap international stocks instead of chasing pricey US shares.The strategist, who coined the popular “Magnificent Seven” term to refer to the handful of tech stocks that powered the S&P 500’s 70% rally since late-2022, said investors have become overexposed to US equities after they attracted record inflows in January.“US exceptionalism now exceptionally expensive, exceptionally well-owned,” the strategist wrote. “‘Magnificent 7’ becomes ‘Lagnificent 7,’ supports broadening of US and global equity and credit markets.”Slowing demand growth for artificial intelligence chips, coupled with the entry of DeepSeek, will dominate the narrative when Advanced Micro Devices Inc., Qualcomm Inc. and Arm Holdings Plc report results next week.Alphabet Inc. will also face questions on how it will mitigate the costs of developing its AI tools in light of DeepSeek’s performance and lower cost. Still, strong demand for cloud services will buoy result for the Google owner and its Magnificent Seven counterpart Amazon.com Inc.Of the 260 respondents, 88% said the debut of the startup’s latest model — which wiped $784 billion from the S&P 500 on Monday — will have little to no impact on the shares of the US technology behemoths in coming weeks. Few are cutting their exposure to the S&P 500, an index dominated by the massive tech companies.
