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February 4, 2025

S&P 500 Dips as Trump’s Tariffs Take Effect on Trading Partners

The S&P 500 experienced a decline of 0.50% on Friday, closing at 6,040.53, as President Donald Trump’s tariffs targeting key U.S. trading partners officially took effect over the weekend.

  • The Dow Jones Industrial Average dropped 337.47 points (-0.75%), finishing at 44,544.66, primarily impacted by Chevron (NYSE:CVX).
  • The Nasdaq Composite, heavily weighted with tech stocks, fell by 0.28% to 19,627.44.
  • Despite a 3.07% decrease on Monday, the Nasdaq ended the week with a 1.6% overall drop, while the S&P 500 lost 1%. However, the Dow managed a modest gain of 0.3% throughout the week.
  • Shares of Nvidia (NASDAQ:NVDA) plunged nearly 17% on Monday, closing the week down 16%.

January’s Market Close with Gains

Despite the fluctuations, each of the three major indexes finished January positively:
โœ… S&P 500: +2.7%
โœ… Nasdaq: +1.6%
โœ… Dow: +4.7%

Escalating Trade War Dynamics

On Saturday, Trump formally imposed widespread tariffs on imports from Mexico, Canada, and China.

  • Mexico and Canada are subjected to a 25% import tariff, while China faces a 10% duty.
  • This action aims to address issues related to illegal immigration and fentanyl imports.
  • Immediate retaliatory responses:
    • Mexico and Canada have vowed to impose counter-tariffs.
    • China plans to take action at the WTO and may engage in further countermeasures.

Market Outlook: What Lies Ahead?

Market participants are closely watching rising global trade tensions, which could lead to heightened inflationary pressures and disruptions in supply chains.

To track these ongoing trends, explore:

  • Earnings Calendar API โ€“ Understand how companies are adapting to trade challenges.
  • Sector P/E Ratio API โ€“ Identify shifts in valuations across sectors.

Given the escalating trade tensions, the market anticipates further volatility in the weeks to come.

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