Trump later tempered tariff threats and ruled out taking Greenland by force, but the S&P 500, Nasdaq and the Dow Jones were still expected to end the week lower. Flows to safe havens continued, pushing gold to a record high.A big disappointment on Friday was chipmaker Intel, which fell 14.9%. The company expects quarterly revenue and profit to be below market estimates and says it is struggling to meet demand for its server chips used in AI data centers. Shares are up about 50% since the beginning of the year.
An index of semiconductors fell 1.6% from the previous session’s record high, while Wall Street’s fear gauge rose after falling the past two sessions.
“Earnings season has been good, but there have been a few stocks that haven’t provided a rosy outlook and have fallen accordingly as investors took action. The guidance is more important now than ever,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
“Investors will remain cautious because not only do we have profits, but so does the Fed. We don’t expect any change, but the question is what they say in their communiqué.” At 9:48 a.m. ET, the Dow Jones Industrial Average fell 320.71 points, or 0.65%, to 49,063.30, the S&P 500 lost 14.68 points, or 0.21%, to 6,898.78 and the Nasdaq Composite lost 36.50 points, or 0.16%, to 23,399.52.
Fed rate move expected
The Federal Reserve is expected to keep interest rates at 3.5-3.75% next week, but investors will scour the statement and Chairman Jerome Powell’s comments for signals about what’s next. CMEGroup’s FedWatch tool shows markets eyeing the first rate cut before June.
US business activity was flat in January as an improvement in new orders was offset by a subdued labor market, S&P Global’s flash PMI data showed.
Many of the so-called Magnificent Seven stocks, including Apple, Tesla and Microsoft, are set to report profits next week. Their prospects will be closely watched to see how much juice is left in the growth stories that have supported their sky-high valuations thus far.
Driven by a strong US economy and expectations of rate cuts this year, the market rally has expanded beyond the mega-cap names to other sectors. The small-cap Russell 2000 and Dow Jones Transports indexes hit record highs on Thursday.
Among other gainers, Nvidia rose 1.4% after Bloomberg News reported that Chinese officials have told Alibaba, Tencent and ByteDance that they can prepare orders for Nvidia’s H200 AI chips.
US-listed shares of miners such as Hecla Mining and Coeur Mining rose 0.6% and 0.3% respectively, after silver prices hit record highs and neared the $100 per ounce mark for the first time.
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