Topline
Stocks gave up earlier gains Friday as the White House reaffirmed President Donald Trump’s plan to implement some of his long-promised tariffs Saturday, with the market closing out a whirlwind week highlighted by Nvidia’s record-breaking losses in reaction to China’s DeepSeek cheaper AI model and a flurry of earnings reports.
Stocks proved resilient this week after Monday’s scare.
Key Facts
All three major indexes were down for the day, reversing what had been as much as a 0.8% gain for the S&P 500 and a 1.5% rally for the tech-heavy Nasdaq as in-line inflation data Friday morning and Apple’s double earnings beat reported Thursday afternoon helped boost stocks in morning trading.
The Dow Jones Industrial Average declined 340 points, or 0.8%, by close and the S&P and Nasdaq fell 0.5% and 0.3%, respectively.
The negative turn came after White House press secretary Karoline Leavitt confirmed Trump intends to enact the 25% tariffs on Canadian and Mexican imports and 10% tariff on Chinese imports Saturday.
Leading the swing were Apple and Nvidia, both Silicon Valley giants with significant dealings in China, as shares of Apple went from as much as a 4% morning gain to a 0.7% daily loss, and Nvidia stock turned what was as much as a 3% gain to a 3.7% daily drop.
Nvidia’s slip extended its brutal week, as its market value has tanked $553 billion since last Friday, after DeepSeek’s innovative cheaper AI cast doubt on continued massive spending on Nvidia’s AI processors powering most generative AI technology.
Down 16% since Friday, Nvidia lost more market value over the last week than the total market capitalization of Europe’s most valuable public company, Novo Nordisk.
Contra
Despite Nvidia’s massive losses and a down Friday, this month is a historically strong January for the market, with the Dow up nearly 5% and the S&P almost 3%. That makes it the Dow and S&P’s best January returns since 2019 and the best inauguration month return since January 2013, at the start of former President Barack Obama’s second term.
Crucial Quote
It’s undeniably bizarre for the broader market to advance when Nvidia, which was the world’s most valuable company heading into this week, fell more than 10% this week. “We expect the greater efficiency from new, lower-cost algorithms to lead to increased economic productivity, which is supportive of the broader equity market,” explained Solita Marcelli, UBS Global Wealth Management’s chief investment officer, Americas, in a Friday note. In short, though the market clearly interprets the increased likelihood that Nvidia, and other AI tech producers like Broadcom and Oracle, take future earnings hits from generative AI getting cheaper, better AI can boost the stock market as a whole as companies across the board benefit from AI-powered productivity gains.
January’s Biggest Stock Winners And Losers
Constellation Energy was the best-performing stock listed on the S&P, returning 34%, while GE Aerospace (up 22%) and Facebook parent Meta (up 18%) were the best-performing “mega-cap” companies worth at least $200 billion, according to FactSet data. Public utility Edison International was the worst-returner, falling 31%, while Nvidia was the biggest mega-cap loser, dropping 9%.
This Week’s Biggest Stock Winners And Losers
Cruise liner Royal Caribbean and enterprise software firm IBM rose the most, returning 15% and 14%, respectively, while Apple and Meta’s 8% gains led all mega-caps. Nvidia was unsurprisingly the worst-performing company worth at least $150 billion, while delivery service UPS and shoe seller Deckers Brands were the biggest losers overall, falling about 15% apiece.
Further Reading
Source: Stocks Give Up Gains As Tariffs Loom—Nvidia’s DeepSeek Selloff Balloons Back To $550
