Chaos ruled Wall Street and crypto this week after Donald Trump’s latest tariff threats shook traders to their core. Stocks plunged on Friday, closing out a miserable week filled with economic uncertainty, inflation spikes, and weak earnings reports from Nvidia, Meta, and Microsoft.
The Dow Jones Industrial Average dropped a nasty 444.23 points, closing at 44,303.40. The S&P 500 fell 0.95% to 6,025.99, and the Nasdaq lost 1.36%, finishing the Friday session at 19,523.40. Basically every major index ended the week in the red.
The disaster started last weekend when Trump announced plans for 25% tariffs on Canada and Mexico, and 10% on China. After speaking to presidents Justin Trudeau and Claudia Sheinbaum of Canada and Mexico, he agreed to delay their tariffs, but China wasn’t so lucky.
The 10% tariff hit on Tuesday, and markets have been in freefall since. On Friday, Trump piled on, saying, “I’ll be announcing that next week—reciprocal trade—so that we’re treated evenly with other countries.” These markets just catch a break.
Treasury yields spike as inflation fears grip Wall Street
Traders were already on edge thanks to signs that inflation was heating up. The University of Michigan’s consumer sentiment index fell to 67.8 in February, lower than the 71.3 economists expected. What really had investors sweating was that survey respondents expect the one-year inflation rate to hit 4.3%, the highest since November 2023.
Rising prices mean the Fed may be forced to keep hiking rates, something no one wants to hear. And as if that wasn’t bad enough, the 10-year Treasury yield spiked to 4.5% during Friday’s session. January’s jobs report showed unemployment fell to 4% from 4.1%, and average hourly earnings came in higher than expected.
Wage growth might sound good, but not when it comes with rising inflation. So yeah markets panicked. Amazon made things worse when its stock tumbled 4% after disappointing guidance for Q1 revenue growth between 5% and 9%, the company’s weakest forecast on record.
Investors ignored the fact that Amazon had beaten its fourth-quarter earnings estimates. Alphabet (Google’s parent company) continued its downward spiral after reporting mediocre results earlier in the week.
Bitcoin struggles as gold soars amid market chaos
And of course, as per usual, Bitcoin is also having a pretty rough time. While gold prices surged 9% this year, Bitcoin has gained just 2.65%—not exactly impressive. Trump’s return to the Oval was gonna be this big catalyst for the OG crypto, but his unpredictability and rising geopolitical tensions have investors freaking out and losing ground to the bears. So Bitcoin has had a tough time staying above $100,000 since inauguration day.
Meanwhile, gold hit a record high of $2,882 an ounce on Friday after Trump made a controversial comment about the US possibly taking over Gaza. The White House tried to downplay it, but damage was done.
Right now, Bitcoin is about 10% below its all-time high. Despite being marketed as a store of value due to its capped supply of 21 million tokens, the OG is acting more like a volatile tech stock. Citi analysts predict gold could hit $3,000 as trade tensions between the US and China continue. And the US dollar remains strong, which isn’t helping Bitcoin’s case.
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