The major stock indexes in the U.S. experienced a decline, breaking their four-day winning streak. However, they secured their second consecutive weekly increase after President Donald Trump adopted a less aggressive stance on tariffs and called for reduced interest rates and lower oil prices during his initial week back in the White House.

On February 1, Trump proposed implementing a 25% tariff on imports from Canada and Mexico, which is later than his earlier commitment to impose tariffs on his first day in office. Furthermore, he suggested a 10% tariff on all Chinese goods, a significant reduction from the 60% rate he proposed during his campaign.

Matthew Ryan, head of market strategy at the global financial services firm Ebury, commented, “Investors feel that Trump’s tariff plans are likely less of a priority now, and they may be far less severe than was initially feared.”

Additionally, Trump spoke to world leaders at the Davos summit in Switzerland, advocating for lower interest rates and requesting that oil-producing nations, including Saudi Arabia, reduce oil prices. As a result, oil prices dipped by 0.09% to $74.55 per barrel.

The S&P 500 index ultimately fell by 0.29%, losing 17.47 points, to close at 6,101.24, below its record finishing point of 6,118.71 set on Thursday and its intraday peak of 6,128.18 reached earlier in the day. The Dow Jones Industrial Average decreased by 0.32%, or 140.82 points, finishing at 44,424.25, while the Nasdaq Composite dropped by 0.5%, or 99.38 points, to close at 19,954.30. The 10-year Treasury yield retreated to 4.617%.

Interest Rates

Even though Trump expressed a desire to “demand” lower interest rates, it is ultimately the Federal Reserve that manages monetary policy and typically operates independently of the government.

The Federal Reserve is scheduled to meet next week, with a policy announcement expected on Wednesday. Following a series of strong economic indicators, including an impressive jobs report for December, market expectations suggest that a rate reduction is not likely, according to the CME’s FedWatch tool, which analyzes market predictions for rate changes.

Currently, the Fed’s target for short-term interest rates is between 4.25% to 4.5%.

Diverse Company Updates

With concerns over tariffs taking a backseat for now, investors are shifting their focus back to corporate developments, particularly earnings reports. Key company news from the day includes:

• Verizon surpassed analysts’ earnings predictions for the last quarter of 2022, also reporting its strongest postpaid phone subscriber growth in five years, which surprised experts. Shares increased by nearly 1%.
• Novo Nordisk’s stock surged about 8.5% following encouraging early-stage outcomes for its once-a-week obesity drug, amycretin.
• Twilio presented a better-than-expected earnings outlook, resulting in a 20% rise in its stock price.
• Texas Instruments announced that its first-quarter profits would likely fall short of analysts’ expectations due to an inventory surplus in its key automotive and industrial sectors. Consequently, shares fell by 7.5%, marking its steepest decline since March 2020.
• CSX’s shares dropped nearly 3% after the transportation firm reported a decline in fourth-quarter earnings caused by significant reductions in coal and fuel surcharge revenues.
• Intuitive Surgical’s stock decreased by 4.4%, witnessing its largest drop since October 2023, following a cut to its gross profit margin forecast.
• Boeing reported a larger-than-expected fourth-quarter loss due to an ongoing strike, expenses related to U.S. government contracts, and costs linked to multiple job layoffs. Consequently, their shares slid by 1.37%.

Bitcoin Movement

Bitcoin pricing continues to fluctuate after hitting a record high ahead of Trump’s inauguration on Monday, driven by speculation regarding a potential executive order for a national bitcoin reserve.

However, this order did not materialize, leading to a stabilization of bitcoin prices. Recently, the cryptocurrency rose by 1.03%, reaching $105,154.50.

On one hand, Trump has committed to halting the Securities and Exchange Commission’s crackdown on the crypto industry, appointing crypto-advocate Paul Atkins to lead the commission. Additionally, he established a crypto working group on Thursday, headed by White House crypto and AI czar David Sacks.

 
Yet, many market analysts argue that these actions fall short of fulfilling Trump’s earlier promise of a national strategic crypto reserve.

(This story has been updated with the latest information.)

Medora Lee is a reporter specializing in money, markets, and personal finance.