Wall Street Slips as Inflation Jitters, Tariff Threats and Tech Weakness Weigh on Sentiment

U.S. stocks extended losses with the Nasdaq leading the decline amid hotter producer prices, renewed tariff worries from Trump, and heavy selling in gold and tech shares, even as European markets gained ground.

The tech-heavy Nasdaq led the way lower, slumping 223.30 points (0.9%) to 23,461.82 while the Dow slid 179.09 points (0.4%) to 48,892.47 and the S&P 500 fell 29.98 points (0.4%) to 6,939.03.

Wall Street closed lower as renewed inflation worries weighed on sentiment following a stronger-than-expected rise in producer prices. The Labor Department reported that the producer price index for final demand surged 0.5% in December after a 0.2% rise in November while annual growth held steady at 3%, defying expectations for a slowdown to 2.7%.

 

Market sentiment was further dented by fresh tariff threats from President Donald Trump, including a proposed 50% levy on Canadian aircraft and new penalties on goods from nations supplying oil to Cuba. Investors also reacted to Trumps announcement of former Fed Governor Kevin Warsh as his pick to succeed Jerome Powell, raising uncertainty over whether the new chair would maintain a dovish monetary stance.

Gold stocks turned in some of the market's worst performances amid a nosedive by the price of the precious metal, with the NYSE Arca Gold Bugs Index plummeting by 12.6%. Semiconductor and computer hardware stocks also saw substantial weakness, contributing to the slump by the tech-heavy Nasdaq. Steel, airline, biotechnology and housing stocks notably moved downwards, moving lower along with most of the other major sectors.

Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index edged down by 0.1%, China's Shanghai Composite Index slumped by 1% and Hong Kong's Hang Seng Index tumbled by 2.1%. The major European markets moved to the upside on the day. While the German DAX Index advanced by 0.9% the French CAC 40 Index climbed by 0.7% and the U.K.'s FTSE 100 Index rose by 0.5%.

In the bond market, treasuries gave back ground following the rebound seen on Thursday. As a result, the yield on the benchmark ten-year note which moves opposite of its price, rose 1.4 bps to 4.24%.

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