Markets Process Tariff Talks, Jobs Data, and Q4 Reports:
Stocks posted modest losses last week as investors navigated increased volatility driven by tariff negotiations, January employment data, and Q4 corporate earnings reports.
The S&P 500 Index slipped 0.24%, while the Nasdaq Composite Index lost 0.53%. The Dow Jones Industrial Average fell 0.54%. The MSCI EAFE Index, which tracks developed overseas stock markets, edged ahead 0.17%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 12/27/24 = 0)
Tariffs, Jobs, and Q4 Reports
On Monday, stocks opened lower on news that tariffs on Mexico, Canada, and China went into effect over the weekend. However, markets rebounded midmorning following news of a U.S.-Mexico deal that delayed new trade rules. News of a similar last-minute agreement with Canada followed.3
Stocks continued their rally midweek, led by technology stocks from companies that provided upbeat Q4 corporate reports.4,5
The S&P 500 and Nasdaq rose for the third consecutive day on Thursday, while the Dow experienced a slight fall as investors digested more corporate earnings reports. The week closed on a down note as a mixed jobs report and a cautionary inflation outlook disappointed investors.6,7
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
Mixed Signals on the Labor Market
As has happened several times in recent years, two job reports told conflicting stories about the state of the jobs market. On Friday, the Bureau of Labor Statistics reported that 143,000 jobs had been added for the month–a four-year low. Earlier in the week, the ADP report showed the economy added 188,000 new jobs, ahead of the 150,000 economists expected.8,9
Why do the reports tell different stories? Economists point to various factors, including how January can be challenging to measure accurately, typically due to the more significant number of laid-off seasonal workers.10
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1The Wall Street Journal, February 7, 2025
2Investing.com, February 7, 2025
3The Wall Street Journal, February 3, 2025
4CNBC.com, February 4, 2025
5CNBC.com, February 5, 2025
6The Wall Street Journal, February 6, 2025
7The Wall Street Journal, February 7, 2025
8MarketWatch.com, February 4, 2025
9MarketWatch.com, February 5, 2025
10The Wall Street Journal, February 7, 2025
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