Wall Street Remains Focused On Earnings Amid Waning Confidence In Trump Administration

Barry Adams
10 Feb, 2025
New York City

Wall Street investors turned cautious amid waning confidence in the White House and faltering enthusiasm surrounding artificial intelligence. 

The S&P 500 index decreased 0.1%, and the Nasdaq Composite declined 0.2% amid another round of threats issued by the White House targeting steel and aluminum products.

Tariffs are nothing but import taxes paid by the U.S. consumers, which ultimately drives higher inflation and forces the Federal Reserve to keep higher rates for longer. 

Global investors and Wall Street have started overlooking Trump's tariff threats, which are designed for domestic political consumption, as they do little to thwart imports and support domestic industries and businesses. 

Despite Trump's tariffs on imports from China during his first administration, shipments from the world's second largest economy increased by more than 50%. 

The current round of tariffs on Chinese goods is just as likely to fail in slowing down imports, and Chinese manufacturers are diversifying manufacturing bases. 

Moreover, U.S. consumers and businesses have few alternatives in many industries and for a range of products, as most of manufacturing has shifted to Asia following the free trade policy pursued by both political parties. 

This week investors will remain glued to the next batch of corporate results and two inflation reports in the U.S.

Coca-Cola, McDonald’s, Cisco Systems, Applied Materials, and Deere & Company are some of the leading companies scheduled to release their earnings. 

On the economic front, investors are awaiting updates on retail sales, industrial output, and inflation. 

 

Global Markets Previous Week 

Global financial markets retained an upward bias following strong corporate earnings, accommodative central banks, and upbeat market sentiment.

European markets advanced for the fifth consecutive week after the Bank of England lowered rates as expected, and German exports were ahead of market expectations.

Markets in China soared in the hopes of an earnings rebound driven by affordable access to artificial intelligence.

The S&P 500 index and the Nasdaq Composite extended the market rally to the fourth consecutive week as investors' confidence in the Trump administration ebbed amid flip-flops on tariffs on Mexico, Canada, and China. 

Last week, investors reviewed the latest updates on nonfarm payrolls, job openings, and record trade deficits in 2024.

The job market is expanding at a slower pace, but market conditions remain solid. 

The U.S. economy added 143,000 net new jobs in January, far less than the upwardly revised 307,000 in December.

The jobless rate edged down to 4.0%, and wages inched up to 0.5% from the previous month and increased the annual growth to 4.1%.

The U.S. economy added an average of 166,000 jobs a month, totaling 1.99 million in 2024, slower than the average monthly increase of 225,000, totaling 2.7 million in 2023.

Despite the slowdown in job growth, policymakers are likely to focus on the wage increase, which is far higher and inconsistent with the Fed's target rate of 2%.

 

U.S. Indexes and Yields

The S&P 500 index increased 0.38% to 6,048.94, the Nasdaq Composite edged up 0.81% to 19,680.57, and the Russell 2000 index was down 0.74% to 2,290.03.

The yield on 2-year Treasury notes edged lower to 4.28%, 10-year Treasury notes decreased to 4.49%, and 30-year Treasury bonds advanced to 4.70%.

WTI crude oil increased $0.88 to $71.88 a barrel, and natural gas prices edged higher by $0.10 to $3.41 a thermal unit.

Gold increased by $42.32 to 2,901.17 an ounce, and silver edged up by $0.32 to $32.11.

The dollar index, which weighs the US currency against a basket of foreign currencies, increased 0.17 to 108.27 and traded at a two-year high.