The U.S. stock market is set to open sharply lower this morning, on the announcement by the Trump Administration that steep tariffs will be placed on imports coming from Canada, China, and Mexico. Volatility has returned to Wall Street, in a difficult and uncertain market environment. A few days ago, technology stocks plunged on word that China-based firm DeepSeek has launched an AI (artificial intelligence) application that can create serious competition for U.S. firms. As noted, this was followed by the tariff announcement this past weekend. Meanwhile, in the days ahead traders will also face a barrage of earnings reports, as well as some key economic releases. As we were publishing this write up, the S&P 500 Index futures were down about 85 points (-1.40%) in pre-market trading.
In economic news, this morning the ISM (Institute for Supply Management) Manufacturing Index for January will be released. The ISM Services Index will follow on Wednesday. In addition, numerous Federal Reserve officials will be presenting speeches at various events over the next few days. Looking further ahead, on Friday morning the government is slated to deliver the January employment report, an issuance that can potentially move the market in one direction or the other. Analysts currently think the numbers will show that roughly 175,000 jobs were added to the economy in January, down from the 256,000 figure logged in December. The unemployment rate is expected to hold steady at the 4.1% mark. Investors will also be closely tracking any changes to hourly wages, as inflation remains an ongoing concern.
The fourth-quarter earnings season continues this week, with a large batch of corporations slated to release results. Investors will likely be paying close attention to the companies in the vital technology sector. Later today, we will receive a report from Palantir (PLTR), which offers cutting-edge AI analytic solutions. Tomorrow, Alphabet (GOOG) will weigh in with its report. On Wednesday, we will hear from Uber Technologies (UBER), which is also a widely-followed issue.
Technically, the stock market has been quite volatile this year. However, stocks are still holding up reasonably well, with the S&P 500 Index just slightly below record high ground. It is encouraging to see that the rally is starting to broaden out, and that sectors other than technology are showing leadership. Specifically, capital now seems to be flowing into the financial issues, consumer stocks, and shares of communications companies. – Adam Rosner
At the time of this article’s writing, the author had positions in Alphabet and Uber.
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