Overnight U.S. Stocks | Trump's Tariffs "Surprise" the Market, Three Major Indices Close Lower

According to Zhitong Finance, on Friday, White House Press Secretary Levitt confirmed at a press conference that the Trump administration will impose a 25% tariff on goods from Mexico and Canada starting February 1, and denied Reuters' claim that the tariffs would take effect on March 1. Affected by this news, the three major U.S. stock indexes turned negative during the session.

【U.S. Stocks】 As of the close, the Dow Jones Industrial Average fell 337.47 points, a decrease of 0.75%, closing at 44,544.66 points; the Nasdaq fell 54.31 points, a decrease of 0.28%, closing at 19,627.44 points; the S&P 500 index fell 30.64 points, a decrease of 0.50%, closing at 6,040.53 points. For the week, the Dow rose 0.27%, the Nasdaq fell 1.64%, and the S&P 500 index fell 1%.

【European Stocks】 The German DAX 30 index fell 0.29 points, a decrease of 0.00%, closing at 21,730.29 points; the UK FTSE 100 index rose 30.35 points, an increase of 0.35%, closing at 8,677.23 points; the French CAC 40 index rose 8.53 points, an increase of 0.11%, closing at 7,950.17 points; the Euro Stoxx 50 index rose 3.94 points, an increase of 0.07%, closing at 5,286.15 points; the Spanish IBEX 35 index fell 48.70 points, a decrease of 0.39%, closing at 12,372.00 points; the Italian FTSE MIB index rose 54.28 points, an increase of 0.15%, closing at 36,484.00 points.

【Asia-Pacific Stock Markets】 The Nikkei 225 index rose 0.15%, and the Jakarta Composite Index in Indonesia rose 0.5%.

【Cryptocurrency】 Bitcoin fell below $103,000 per coin during the day, down 1.67%.

【Gold】 Spot gold once rose to $2,808.50 per ounce, setting a new historical high. Gold prices closed below the record high set on Thursday, but the monthly increase in dollar terms was still the largest since August 2011. Before the U.S. presidential election, as investors flocked to safe-haven assets, gold prices reached a historical high. After the election, many investors shifted back to higher-risk assets, causing gold prices to retreat. However, gold futures prices rebounded in January, rising 7% this month, closing at $2,812.50 per ounce on Friday. Factors driving gold prices up include: a weaker dollar, declining U.S. Treasury yields making non-interest-bearing gold more attractive, and rising concerns among central banks and investors about tariffs and inflation, leading to increased purchases of gold.

【Crude Oil】 Light crude oil futures for March delivery on the New York Mercantile Exchange fell 20 cents, closing at $72.53 per barrel, a decrease of 0.27%; Brent crude oil futures for March delivery fell 11 cents, closing at $76.76 per barrel, a decrease of 0.14%.

【U.S. Dollar】 The ICE U.S. Dollar Index rose 0.65%, closing at 108.501 points, with a cumulative increase of 0.98% for the week (after the Federal Reserve announced to hold steady), roughly flat in January, retreating after rising to 110.176 points on January 13, and then falling to 106.969 points on January 27. The Bloomberg Dollar Index rose 0.38%, closing at 1,307.70 points, with a cumulative increase of 0.97% for the week, down 0.15% for January, having retreated after rising to 1,323.16 points on January 13, and then falling to 1,291.87 points on January 27 [Macroeconomic News]

Trump's tariff news shakes the market, dollar index soars, gold declines. White House Press Secretary Levitt confirmed at a press conference that the Trump administration will impose a 25% tariff on goods from Mexico and Canada starting February 1, denying Reuters' claim that the tariffs would take effect on March 1. Following the announcement, the dollar index DXY rebounded by as much as 69 points from its daily low, reaching 108.48, while the USD/CAD erased earlier losses and turned back up. Spot gold briefly dipped to $2,795.34 per ounce. Bitcoin fell below $103,000 per coin during the day, down 1.67%. Both WTI and Brent crude oil narrowed their daily declines, nearing flat, reported at $72.89 per barrel and $77.02 per barrel, respectively.

Fed's Goolsbee: Uncertainty should decrease as rates approach neutrality. Fed's Goolsbee stated that inflation data was better than expected. As rates approach neutrality, uncertainty should decrease. He noted that inflation has remained around 2% for several months, showing robust performance. He expects the base effect to further lower inflation, with more declines anticipated by 2025. The one-time tariff increase is theoretically temporary and may not require policy responses.

OpenAI launches lightweight AI model o3-Mini. OpenAI has launched a new lightweight AI model, reportedly capable of human-like reasoning and improved efficiency. This product will be closely watched following the release of the open-source model by DeepSeek in China. The model, named "o3-mini," was released on Friday and is available for free. OpenAI first announced plans for o3-mini last December, while also revealing the more powerful o3. Both models are designed to answer complex questions related to programming, mathematics, and science. The timing of the launch was anticipated, as OpenAI indicated last year that o3-mini would be released by the end of January, followed shortly by o3. However, the industry is amazed by the progress made by DeepSeek, particularly due to lower costs, sparking heated discussions. OpenAI is currently seeking to raise $40 billion at a valuation of $300 billion.

US consumer price growth accelerated at the end of last year, supporting the Fed's decision to pause rate cuts. The Fed's preferred inflation gauge slightly accelerated in December, as price growth remained stubbornly above the central bank's 2% annual target. The Fed will pause rate cuts until inflation conditions improve. The PCE rose by 0.3% in December, with a year-on-year increase of 2.6%, in line with expectations. The core PCE index rose by 0.2% in December, with a year-on-year growth of 2.8%. Data shows that consumer price growth is expected to accelerate by the end of 2024, supporting the Fed's latest decision to pause further rate cuts.

ECB Governing Council member Villeroy states the direction for further policy easing is clear. ECB Governing Council member Francois Villeroy de Galhau stated that the direction for further policy easing by the central bank is "clear," as it aims to sustainably bring inflation down to the 2% target before summer, while economic growth remains disappointing The day before the speech by the Governor of the Bank of France, the European Central Bank cut interest rates for the fifth time since June last year, stating that "the downward trend of inflation is on track." Data released on Thursday also showed that the Eurozone's economy stagnated in the fourth quarter, prompting the European Central Bank to assess that economic activity faces downside risks. "The direction forward is clear: our monetary policy will shift from restrictive to neutral, which should support a gradual economic recovery while ensuring inflation reaches the target," Villeroy said. "How fast should we move and how far? This is what I call 'agile pragmatism,' a data-driven approach will guide us." Villeroy also emphasized at a conference in London that "long-term yields have risen, limiting the easing of overall financial conditions."

【Individual Stock News】

Wall Street closely watches Nvidia (NVDA.US) key technical levels, hoping to recover from the DeepSeek sell-off and regain its glory. Wall Street is focused on Nvidia's stock, given its ability to influence the market. Technical analysts are looking for signs that this chip manufacturing giant will regain its upward momentum. The stock rose 2.6% on Friday, recovering some of the losses from earlier in the week. DeepSeek's AI model can compete with those of OpenAI and Meta Platforms Inc., and the chips used are cheaper, older Nvidia chips, leading to a significant drop in Nvidia's stock, evaporating market value at a scale unprecedented in U.S. stock market history. Currently, the stock is about 15% lower than its record high set last year, hovering around the 200-day moving average — a key indicator for technical analysts to measure stock momentum. After Nvidia fell below this critical level on Monday, it has closed above that level for the past three trading days.

Insiders: Apple (AAPL.US) abandons the development of high-end AR glasses project for Mac. According to insiders, Apple has abandoned the secret development plan for high-end AR (augmented reality) glasses that would pair with the Mac, a project codenamed N107 that was originally aimed at competing with Zuckerberg's Meta devices. This is the latest setback for the company in creating a headset that appeals to ordinary consumers, as it shut down the project this week. The now-canceled product looked like regular glasses but included a built-in display and required a connection to a Mac. After the launch of the mixed-reality headset Apple Vision Pro, this project was seen as a potential development direction.

【Major Ratings】

Citi: Raises Apple (AAPL.US) target price from $255.00 to $275.00, maintaining a "Buy" rating