4:15pm: Weekly losses
Stocks finished Friday’s trading session in the red as US President Donald Trump reaffirmed his plan to impose aggressive tariffs on Canada, Mexico and China starting tomorrow, stoking fears of a trade war between the US and its closest trading partners.
The Dow Jones fell 0.8% to 44,544 points, while the S&P 500 shed 50 points at 6,040 points and the Nasdaq fell 0.3% to 19,627 points.
For the week, the Nasdaq recorded a loss of 1.6%, the S&P 500 was down 1% and the Dow Jones fell 0.3%.
3:22pm: Tariffs to begin Saturday
US President Donald Trump will impose 25% tariffs on imports from Canada and Mexico starting on Saturday, the White House confirmed on Friday afternoon.
This followed a report from Reuters that the tariffs would not be introduced with a process for countries to seek exemptions for certain imports until March 1.
“25% tariffs on Mexico, 25% tariffs on Canada, and a 10% tariff on China for the illegal fentanyl that they have sent to our country, which has killed 10s of millions of Americans,” White House press secretary Karoline Leavitt said.
Canada and Mexico have warned they will retaliate if US tariffs are enforced. Taxing imported oil could also drive up energy costs, potentially impacting fuel and grocery prices.
"No one — on either side of the border — wants to see American tariffs on Canadian goods," Canadian Prime Minister Justin Trudeau said in a post on the social media platform X.
"I met with our Canada-US Council today. We’re working hard to prevent these tariffs, but if the United States moves ahead, Canada’s ready with a forceful and immediate response."
2:50pm: Apple to benefit from AI adoption: BofA
Despite concerns about iPhone demand, the company's March-quarter guidance was better than expected, Bank of America analysts wrote, noting Apple Intelligence as a key driver of upgrades.
Gross margins for fiscal Q2 are projected at 46.5%-47.5%, despite foreign exchange headwinds, and product margins are expected to improve with greater vertical integration.
The firm highlighted Apple’s diverse product portfolio and Services segment as key factors in withstanding macroeconomic pressures, while robust cash generation supports ongoing capital returns. Apple also stands to benefit from increased AI adoption on edge devices.
1:30pm: Stocks retreat but on track for winning month
Most global stock indices ended January on a positive note, with stocks seeing a "bullish finish" to the month, according to Axel Rudolph, Senior Technical Analyst at IG.
"US stock indices seem to have shrugged off Monday's sell-off and look to be on track to overcome their January peaks, having closed their price gaps with last Friday's lows," Rudolph said.
That said, the major indexes were losing ground by early Friday afternoon, with the Dow headed 0.4% lower and the Nasdaq trading 0.6% above water.
12:20pm: Inflation concerns
As of midday on Friday the markets were showing mixed performance across major indices.
The Nasdaq is up 1.2%, driven by strong performances in technology stocks, while the S&P 500 has risen 0.6%. Meanwhile, the Dow Jones Industrial Average remains unchanged.
While the core PCE figures came in line with expectations, Nigel Green of DeVere warns that the disinflationary momentum that markets were banking on has stalled.
“The data is clear: inflation is proving stickier than many had hoped,” said Green.
“This should pour cold water on the idea of imminent rate cuts. The Fed will be extremely cautious about loosening monetary policy too soon, especially after spending years trying to regain control of inflation.”
11:10am: Economy in good shape
Bill Adams at Comerica said PCE inflation ended 2024 slightly above the Fed’s target, but the economy remained in good shape, with solid income growth and stronger-than-expected spending in December.
While markets are wary of inflation risks from Trump’s policy plans, recent data has been positive.
"Prices rose a bit more than the Fed’s target in 2024. But inflation has gone from an emergency to an annoyance," Adams commented.
Adams expects a soft January jobs report next week, which could renew speculation about Fed rate cuts in 2025.
9.54pm: Nasdaq bounces at open
Wall Street enjoyed broad gains as trading got underway on Friday in the wake of expectation-matching personal consumption expenditures figures.
The Nasdaq jumped 0.8% following the bell, as the S&P 500 added 0.4% and the Dow Jones gained 0.3%.
Despite having been hit by the DeepSeek-sparked global tech sell-off on Monday, gains left the Nasdaq and S&P 500 on course to climb 3.2% and 2.1% respectively for the week.
This followed a string of big-tech earnings over the week, with Apple Inc having capped off proceedings temporarily among the Magnificent Seven with positive figures on Wednesday night.
Shares ticked up over 2% as trading got underway as a result, placing Apple top of the Dow’s risers ahead of Amazon.com Inc, which is set to report next week.
Software firm Atlassian Corp was among other gainers on Friday, jumping 18% after trouncing expectations with second-quarter figures.
Walgreens Boots Alliance Inc tanked 15% in the meantime, on news it would suspend dividend payments in a bid to conserve cash.
8.44am: Fed’s preferred measure of inflation in line with expectations
Core personal consumption expenditures increased in line with expectations last month in the US, figures showed on Friday.
According to the US Bureau of Economic Analysis, the index climbed by 0.3% in January, against 0.1% a month earlier but as expected by the market.
The core rate, excluding energy and food, ticked up by 0.2% versus 0.1% beforehand to also match expectations.
On an annual basis, the headline rate grew by 2.6% as the core rate increased by 2.8%.
Personal consumption expenditures totalled US$133.6 billion as personal income hit US$92.0 billion.
Futures continued to point to a solid start on Wall Street, with the Nasdaq seen leading the charge, up 0.8%.
6.44am: Stocks to jump
Wall Street appeared set for a boost on Friday morning after a busy week of big tech earnings gave way to key inflation figures.
Futures had the Nasdaq up 0.8% ahead of the opening bell, while the S&P 500 and Dow Jones were seen 0.5% and 0.3% higher respectively.
Positive figures from Apple Inc overnight looked set to aid gains, with the iPhone maker gaining 3.5% in pre-market deals, after its earnings followed the likes of Meta Platforms Inc, Tesla Inc and Microsoft Corp earlier in the week.
Friday brought a pause from so-called Magnificent Seven updates though, ahead of Alphabet Inc and Amazon.com Inc next week, leaving attention on personal consumption expenditures price index figures.
Dubbed the Federal Reserve’s preferred measure of inflation, expectations were for the figures to show the index up 0.2% in December and flat at 2.8% on an annual basis.
“Barring any significant negative surprises, Fed officials are anticipated to uphold their cautious approach to rate cuts, as signalled earlier this week,” Tickmill Group’s Patrick Munnelly said.
Focus was also set to be on any news around Donald Trump’s tariff talk, after the president signalled sweeping 25% taxes on Canadian and Mexican goods as early as Saturday.