Stock market ends narrowly mixed. Trump's tariff delay edges out hot inflation, weak sales
U.S. stocks started and ended the day little changed but closed out the week in the green as investors powered through hot inflation reports, the postponement of reciprocal tariffs and weak retail sales.
The broad S&P 500 index dipped 0.0072%, or 0.44 points, to 6,114.63, just shy of its record high hit three weeks ago; the blue-chip Dow fell 0.37%, or 165.35 points, to 44,546.08; and the tech-heavy Nasdaq gained 0.41%, or 81.13 points, to 20,026.77. The benchmark 10-year yield dipped to 4.478%.
Data this morning showed consumers sharply curtailed their spending in January, indicating a potential weakening economy, according to the Commerce Department. Retail sales slipped 0.9% in January from an upwardly revised 0.7% gain in December, and below the Dow Jones estimate for a 0.2% decline.
However, economists say don't be alarmed. The economy is still chugging along and the decline is more a reflection of wildfires and winter storms keeping people home as well as consumers taking a break after spending strongly during year-end holidays.
"Don’t freak out, folks, monthly economic indicators are often volatile during natural disasters and bad winter weather," said Bill Adams, Comerica's chief economist. "Retail categories where consumers can put off purchases for a few weeks took a hit in January. Retail sales will likely recover in coming months as Californians pick up the pieces and as winter weather affects the Midwest and East Coast less."
Inflation, tariffs and more
Weak retail sales data come off the heels of a busy week that saw hotter-than-expected inflation reports and President Donald Trump just stopping short of imposing reciprocal tariffs.
Inflation unexpectedly accelerated in January to 3%, a seven-month high, dashing hopes for another Federal Reserve interest rate cut any time soon. An increasing number of economists are even saying the they think the Fed's rate cut cycle is over, especially if Trump ends up imposing broad tariffs that last a long period of time.
"A universal tariff has not yet been announced but could only add to higher costs for consumer and retail companies," said Bea Chiem, retail and consumer managing director at S&P Global Ratings.
Howard Lutnick, Trump’s nominee to lead the Commerce Department, told reporters on Thursday all studies should be complete by April 1 and that Trump could act immediately afterward.
Corporate news
Outside of broad economic news, corporate news continues to roll in and whipsaw individual shares. Some movers include:
- Roku reported earnings during the last three months of the year that topped analysts' expectations. Shares of the streaming platform ended up more than 14%.
- DaVita expects its full-year earnings to miss analysts' expectations. Warren Buffett's Berkshire Hathaway also sold some of its shares in the dialysis company. Shares fell 11%.
- Airbnb rallied nearly 14.5% after the vacation home rentals company's results in the last few months topped analysts' forecasts.
- Applied Materials slid more than 8% after the chipmaking equipment maker forecast revenue in its second fiscal quarter to miss forecasts.
- Moderna added 3.35% even after the vaccine maker reported larger-than-expected earnings in the last three months of the year amid a drop in Covid vaccine demand.
Bitcoin
Bitcoin prices inched higher after signs of rising interest in the digital unit.
Video game retailer GameStop gained 2.5% after CNBC reported the company's considering investing in bitcoin and other cryptocurrencies.
Bitcoin was last up 0.17% at $96,829.83 but remained below the key psychological level of $100,000.
This story was updated with new information.
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.