Market Movements: Trump's Tariff Plans and Big Tech Earnings This Week

Market Recovery and Tariff Concerns

Stocks made a swift recovery from the earlier sell-off driven by DeepSeek but faced pressure on Friday due to President Trump's tariff plans.

On Saturday, Trump confirmed the imposition of tariffs on Canada, Mexico, and China, effective February 4, with duties set at 25% on Canada and Mexico, and 10% on China. These tariffs stem from issues related to fentanyl and illegal migration.

January Performance Summary

Despite the looming tariffs, the S&P 500 rose 2.7% in January, with the Nasdaq Composite up 1.6% and the Dow Jones Industrial Average leading with a 4.7% increase.

Upcoming Reports to Watch

Investors are keenly awaiting the January jobs report and a slew of corporate earnings reports, with 131 S&P 500 companies set to announce their quarterly results, including major players like Amazon, Alphabet, Chipotle, and Eli Lilly.

Tariff Impact on the Market

The full implementation of tariffs by February 4 is expected to shape market narratives. Economists warn that these tariffs could lead to inflation. In response, Canada plans to impose 25% counter-tariffs on approximately CAD $155 billion of American-made products.

Market reactions to these developments will be critical as investors digest Trump's tariff promises. According to Evercore ISI chief strategist Sarah Bianci, the extent of these tariffs may exceed what the market anticipated.

Federal Reserve's Stance

The Federal Reserve decided to hold interest rates steady, awaiting clearer insights on inflation and the potential impacts of the tariffs on the economy.

President Donald Trump holds a signed executive order on deregulation in the Oval Office of the White House, January 31, 2025.