Financial markets experienced a modest retreat Friday from their recent record highs, as investors processed President Donald Trump’s evolving stance on international trade tariffs. The shift in market sentiment followed Trump’s appearance at the World Economic Forum in Davos and subsequent media communications.
Despite Thursday’s robust performance, which saw the S&P 500 achieve new heights with a 0.73% increase across all sectors, early Friday trading indicated a slight pullback. Futures pointed to opening declines, with the S&P 500 projected to open 9 points lower and the Dow Jones Industrial Average expected to decline by 50 points.
The dollar weakened against major currencies, touching a one-month low of 107.528 on the U.S. dollar index, as investors showed increased appetite for risk following Trump’s softened rhetoric on trade relations with China. During a Fox News interview, the President expressed reluctance about implementing tariffs on Chinese goods and indicated potential progress in trade discussions following what he described as a “friendly” exchange with Chinese President Xi Jinping.
In corporate news, Boeing faced challenges as it pre-announced fourth-quarter results, projecting a larger-than-anticipated loss of $5.46 per share, primarily due to costs associated with its recent machinists’ strike. This development suggests Boeing is headed for its sixth straight year of losses, with cumulative losses approaching $36 billion.
Meanwhile, Danish pharmaceutical company Novo Nordisk saw its shares surge 10.6% after reporting promising results from its amycretin obesity treatment trials, which demonstrated a 22% weight reduction in patients over nine months.
In the technology sector, Nvidia showed a slight decline of 0.21% in pre-market trading, while other major tech companies maintained modest gains. The Nasdaq futures indicated a 45-point decrease at the opening bell.
Global markets displayed more optimistic trends, with the MSCI ex-Japan index rising 0.79% and Europe’s Stoxx 600 continuing its record-breaking run toward a fifth consecutive weekly gain. Bond markets remained relatively stable, with 10-year Treasury yields holding at 4.634% and 2-year notes at 4.268%.
In monetary policy news, the Bank of Japan made a significant move by raising its benchmark lending rate to 0.5%, reaching levels not seen since 2008. Governor Kazuo Ueda emphasized a flexible approach to future policy decisions, stating they would be based on ongoing economic and price developments. This decision prompted a 0.75% strengthening of the yen against the dollar, reaching 155.91, while the Nikkei 225 closed marginally lower by 0.07%.
Oil markets showed modest gains despite Trump’s stated intention to pressure OPEC for lower prices. Brent crude futures for March delivery increased by 47 cents to $78.77 per barrel, while WTI contracts rose 42 cents to $75.04 per barrel, both benefiting from the weaker dollar.
The market movements reflect a complex interplay of factors, including evolving trade policies, corporate earnings, and central bank decisions, as investors continue to navigate an increasingly dynamic global economic landscape.