Friday’s Market Turmoil
Friday delivered a jolt to the market as news of impending tariffs sent traders scrambling. After a period of relative calm, driven by easing concerns in the tech sector, a sudden announcement from the White House reignited volatility . President Donald Trump revealed plans to impose new tariffs on China, Mexico, and Canada, pushing the US dollar higher and a stumble in equities.
The S&P 500, which had been on a near 1% rally, reversed course, while the greenback posted its strongest weekly performance since November. The White House confirmed that Trump would impose a 25% tariff on imports from Mexico and Canada, alongside a 10% levy on Chinese goods, starting Saturday. A brief report suggesting a delay in the tariffs temporarily weakened the dollar, but that narrative was quickly dismissed, leading to slight declines in the Mexican peso and Canadian loonie.
In a statement on Friday, President Trump reiterated his intention to introduce tariffs on a broad range of goods in the coming months, targeting industries such as steel, aluminium, oil, gas, pharmaceuticals, and semiconductors. He also signalled potential new tariffs on the European Union, further heightening uncertainty.
Weekly Performance Recap
For the week, the benchmark S&P 500 slipped -1.0%, while the tech-heavy Nasdaq Composite shed -1.6%. The blue-chip Dow Jones Industrial Average climbed +0.3%.
Friday’s Closing Level
| Index | Close | Change | % Change |
|---|---|---|---|
| DOW JONES | 44,544.66 | -337.47 | -0.75% |
| S&P 500 | 6,040.53 | -30.64 | -0.50% |
| NASDAQ | 19,627.44 | -54.31 | -0.28% |
| US 10Y Yield | 4.539% | — | — |
| VIX (Volatility Index) | 16.43 | +0.59 | +3.72% |
Market Reactions and Analyst Insights
Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team, highlighted the impact of the tariff news on market sentiment. “It’s a reminder of how quickly unexpected developments can alter market sentiment,” Skelly said. “How this plays out in the long term is still unclear.”
The stock market had opened the day on a positive note but was quickly rattled by the tariff announcement. The sell-off in equities was further compounded by lingering concerns over a cheaper artificial intelligence (AI) model from Chinese startup DeepSeek, which some fear could challenge the high valuations of tech sector leaders.
Max Gokhman, head of MosaiQ investment strategy for Franklin Templeton Investment Solutions observed that while bulls attempted to maintain confidence amid the turbulence, persistent uncertainty made it difficult for stocks to find solid footing.
This tug-of-war between bullish optimism and bearish headwinds has created a challenging environment for traders. Both buyers and sellers have faced setbacks, and until a clear trend emerges, volatility is likely to persist.
Market Outlook
Recent trading activity suggests that markets may face further downside before attempting to reclaim new highs. The combination of geopolitical uncertainty, tariff risks, and sector-specific concerns continues to weigh on investor sentiment.
Closing Note
As we welcome the Year of the Snake in the Chinese lunar calendar, we extend our wishes for good health and prosperity in the year ahead. May the markets find stability and opportunity amidst the turbulence.
Source: CBOE, Bloomberg
This commentary was written by James Gomes, a seasoned finance professional with over 30 years of industry experience, including a tenure exceeding 20 years at a prominent US bank.
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