Stocks on Wall Street surrendered early gains and closed broadly lower Friday after the White House said President Donald Trump on key U.S. trading partners.
The S&P 500 fell 0.5% and the Nasdaq composite dropped 0.3%. The indexes, which had posted solid gains in morning trading, posted their first weekly loss in three weeks.
The Dow Jones Industrial Average fell 0.8%.
Trump will put in place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective Saturday. The White House provided no word on whether there would be any exemptions to the measures that could result in swift price increases to U.S. consumers.
The selling was broad, with about 75% of the stocks in the S&P 500 closing lower. Technology and energy companies accounted for a large share of the decline.
鈥淚f Trump says it鈥檚 something that could happen by tomorrow that doesn鈥檛 leave a lot of room to move,鈥� said Sam Stovall, chief investment strategist at CFRA. 鈥淭here鈥檚 just so much uncertainty associated with elevating tariffs on our three major trading partners.鈥�
The earlier gains on Wall Street had helped shave losses from the start of the week over worries that the artificial-intelligence boom may not require as much investment as thought.
reversed course from market leading gains to a loss of 0.7%. The company had reported stronger profit for the latest quarter than analysts expected. Wall Street鈥檚 most valuable company, and thus the most influential on the S&P 500 and other indexes, said sales of iPhones dipped. But revenue for its services businesses, such as AppleCare and its app store, rose to a record.
KLA, a supplier to the electronics industry initially rose after reporting profit and revenue that topped analysts鈥� expectations, but then closed down 0.6%. The company, which credited its results on expanding artificial-intelligence and high-performance computing investments, fell 6.3% on Monday. That鈥檚 when tech stocks around the world tumbled, after a Chinese upstart, , said it developed a large language model capable of competing with the world鈥檚 best, without having to use top-flight chips.
The disruption raised questions about whether all the investment expected for AI chips, and is really needed.
Shares of Nvidia, considered the poster child for the AI frenzy, fell 3.7%. They dropped 15.8% for the week. Its Friday in Washington.
Worries that tariffs could end up driving inflation higher helped push long-term bond yields higher, including the 10-year Treasury, which rose to 4.54% from 4.52% late Thursday.
鈥淚t鈥檚 not the safe haven that it normally is because these tariffs might result in higher inflation and the need for the Fed to remain on pause for longer or to reverse course and raise rates,鈥� Stovall said.
Shorter-term U.S. government bond yields mostly fell.
Yields have been generally climbing since September as the U.S. economy has remained much more solid than economists expected. More recently, worries about tariffs and other possible Trump administration policies that could add upward pressure on inflation and the U.S. government鈥檚 debt have also sent yields higher.
The Federal Reserve left its benchmark interest rate unchanged as it closed out its most recent meeting Wednesday. The central bank is signaling a more cautious approach as it waits to see how policies under Trump will impact inflation and the broader economy. Higher tariffs and tax cuts could push inflation higher, while deregulation could possibly reduce it.
鈥淢arkets are on edge watching President Trump鈥檚 plans to raise tariffs and tighten immigration policies, since both are pressuring the Fed to keep interest rates elevated," said Bill Adams, chief economist for Comerica Bank.
On Wall Street, Walgreens Boots Alliance dropped 10.3% after and breaking a streak of quarterly payouts to its shareholders that stretches back more than 90 years.
Exxon Mobil ticked down 2.5% even though the energy giant than Wall Street had forecast. Exxon credited increased production in the U.S. Permian basin and in Guyana for the strong results, but its revenue came in lower than expected.
All told, the S&P 500 fell 30.64 points to 6,040.53. The Dow dropped 337.47 points to 44,544.66. The Nasdaq lost 54.31 points to close at 19,627.44.
In stock markets abroad, indexes ended mixed in Europe after also finishing mixed in Asia.
Japan鈥檚 Nikkei 225 index added 0.1% after a report showed that the country鈥檚 core inflation rate topped the central bank鈥檚 2% target, paving the way for further hikes to interest rates.
The Kospi in South Korea fell 0.8% after trading resumed there following holidays. Markets remained closed in Hong Kong and Shanghai for the Lunar New Year.
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AP Business Writer Alex Veiga contributed.
Stan Choe And Damian J. Troise, The Associated Press
