Once again, we have a week of high volatility, ups and downs, and strong reactions to political statements and economic events. But it seems that in today’s world, and with such a determined and energetic administration as the one in the United States, there will be many more such weeks ahead. So, what exactly worried, delighted and confused investors this week? This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
Over the weekend, President Trump announced tariffs on Mexico, Canada, and China, totaling $1.3 trillion. Stocks dropped on Monday, and the U.S. dollar surged. However, by Monday, tariffs on Canada and Mexico were postponed for a month, contingent on border security measures. While concerns about Mexico’s border were expected, Canada’s inclusion puzzled many. Yet, Trump’s pressure tactics worked—Colombia also complied. China, however, won’t be as easy to intimidate and has already launched an investigation into Google’s Chinese operations.
Musk and his team continue to shake Washington’s establishment. However, resistance is mounting—the court restricted his access to the U.S. Treasury’s payment system following union complaints about data privacy violations. Bloomberg noted that Musk had already accessed sensitive taxpayer and contractor information, raising conflict-of-interest concerns.
Over 100 S&P 500 companies reported earnings this week, but all eyes were on Alphabet and Amazon. While their quarterly results were strong, forecasts disappointed. Despite this, AI investments remain massive. Nvidia’s upcoming report in late February is unlikely to change the overall sentiment—investors are harder to impress, and soaring stock prices add uncertainty.
The labor market remains strong, affecting Fed rate decisions. January saw 143K new jobs, with unemployment dropping to 4%. Wage growth accelerated to 4.1% annually, exceeding expectations. This dims hopes for a Fed rate cut, weighing on markets.
Unpredictable policy shifts and historically high stock valuations create uncertainty. Market professionals struggle to forecast amid rapid changes, making volatility the new norm.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
