Market Whirlwind: Tariffs, Tech Volatility, and Gold Records
The first week of February saw significant ups and downs in the market as investors dealt with a complex political environment and a rush of corporate earnings reports. President Donald Trump stirred the pot by declaring a 25% tariff on Mexico and Canada and initiating a 10% tax on Chinese imports. However, stocks rebounded when the Trump administration paused tariffs on Mexico in exchange for the country’s commitment to border security. Throughout the week, major tech companies reported mixed earnings, impacting Wall Street’s direction.
The week also highlighted shifts in Treasury yields and gold prices—with gold reaching multiple record highs—as investors examined important job figures to mark the week’s end. As a result, all three major U.S. indexes are projected to finish the week on a positive note.
Noteworthy Earnings Reports This Week
Among this week’s earnings reports, Alphabet (GOOGL) made headlines, experiencing its worst day since 2023 after failing to meet fourth-quarter revenue expectations. In contrast, Palantir Technologies (PLTR) enjoyed a substantial stock increase following its quarterly results. Advanced Micro Devices (AMD) encountered a post-earnings meltdown, while PayPal (PYPL) faced challenges despite reporting strong financial figures.
Walt Disney (DIS) saw a muted response to its earnings report, yet options traders quickly targeted the stock. To wrap up the week, Amazon.com (AMZN) delivered a fourth-quarter performance that exceeded expectations but offered softer-than-anticipated guidance for the current quarter.
Impact of Trump’s Tariffs
Tariffs played a crucial role in shaping market movements this week, while Trump’s policies affected various individual stocks. Constellation Brands (STZ) took a hit due to the 25% tariff on Mexican imports, affecting its Modelo and Corona beer sales. Shares of apparel retailers Nike (NKE) and Lululemon Athletica (LULU) also declined. Surprisingly, several cryptocurrency-related stocks dropped as Bitcoin (BTC) faced uncertainty related to the impending tariffs.
Meta Platforms (META), owner of Facebook, was under scrutiny as investors speculated on its potential gains should Trump secure a second term. The emergence of “broligarchs”—the Big Tech billionaires backing Trump—sparked discussions about their possible benefits or influence over administration policies.
Upcoming Economic Data
Looking ahead, investors should be aware of anticipated inflation data, retail sales figures, and numerous speeches from Federal Reserve officials next week. Companies like Airbnb (ABNB), CVS Health (CVS), McDonald’s (MCD), and more are preparing to report their earnings. Overall, traders are advised to exercise caution moving forward.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
