NEW YORK: Wall Street’s main indexes were muted in choppy trading after China increased its tariffs on US imports to 125%, escalating a trade war that has hit global markets recently, while results from big Wall Street banks set the earnings season rolling.
Stocks fell briefly on Friday after data showed US consumer sentiment deteriorated sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions.
China retaliated after US President Donald Trump on Thursday doubled down on the country by increasing tariffs to an effective rate of 145%, even as he announced a 90-day tariff reprieve on most trading partners.
Stocks have been on a roller-coaster ride in response to tariff announcements over the past few days. Wall Street fell for four straight sessions, before bouncing back on Wednesday with the S&P 500 seeing its largest one-day percentage jump since October 2008.
Stocks, however, slumped again on Thursday and were about 7% off from levels seen before last week, when Trump’s “reciprocal” tariffs sparked the market rout.
St. Louis Fed President Alberto Musalem said it’s now closer to his “baseline” view, rather than just an outside risk, that the labor market will soften even as inflation rises due to tariffs.
“Tariffs are likely to lead to a global slowdown, that’s now inevitable because of the effect on confidence and the near-term effects on the actual economy,” said Kiran Ganesh, multi asset strategist at UBS Global Wealth Management.
Meanwhile, JPMorgan Chase gained 2.5% after beating first-quarter profit estimates, while Morgan Stanley fell about 1% after reporting quarterly results. Wells Fargo lost 3.7% after the lender lowered its full-year net interest income expectations.
Despite beating first-quarter profit estimates, executives at the banks warned that sweeping tariffs could fuel risks and weigh on economic growth.
At 11:42 a.m. ET, the Dow Jones Industrial Average fell 32.12 points, or 0.08%, to 39,561.54, the S&P 500 lost 0.24 points to 5,267.81, and the Nasdaq Composite gained 37.75 points, or 0.23%, to 16,425.06.
Megacap and growth stocks were mixed, with Meta Platforms down 1.6% and Apple gaining 2.2%.
The CBOE Volatility index, seen as Wall Street’s fear gauge, was last at 43.59 points - hovering near its highest level since August.
Still, all three major Wall Street indexes are set for robust weekly gains, with the Nasdaq and the S&P 500 on track for their best weekly showing since November 2024.
Investors sought refuge in traditional safe-haven assets such as gold, with the rally in the precious metal lifting gold miners. Newmont and US-listed shares of Barrick Gold rose 8.3% and 6.2%, respectively.
US monthly producer prices unexpectedly fell in March, coming on the heels of a consumer prices reading which also showed an unexpected decline last month.
Comments
Comments are closed for this article.