Markets selloff on Trump tariffs and Ukraine, dollar weakens, gold strikes new record high
This week showed how quickly market sentiment can shift. Despite hitting record highs, U.S. stocks had one of their worst weeks this year. The Nasdaq saw steady selling, gold hit a new high before pulling back.
Stock Market
U.S. stocks had a tough, shortened trading week. The Dow Jones had its worst week since last October, while the S&P 500 hit new highs on Tuesday and Wednesday before turning lower. The sell-off started when Walmart’s weak outlook raised concerns about consumer spending. On Friday, weaker-than-expected economic data worsened the mood, showing slower growth in the services sector.
Nvidia's shares rebounded on Friday, briefly pushing its market cap back into the $3 trillion club alongside Apple, after a sharp 8.5% drop on Thursday that erased about $273 billion in value. Despite this week's 8% slump, Nvidia remains the second most valuable U.S. tech company behind Apple and ahead of Microsoft. Year-to-date, Nvidia shares are down over 12% amid investor concerns about export controls, tariffs, improved AI models, and slower growth. However, Nvidia remains the undisputed leader in the chip space, driven by its dominance in AI graphics processors and strong demand from cloud giants.
European stocks also struggled, ending the week lower. Market uncertainty was fueled by concerns over new tariffs proposed by Donald Trump and tensions in Ukraine. Germany’s DAX fell 1%, France’s CAC 40 dropped 0.29%, and the UK’s FTSE 100 lost 0.84%.
Gold
Gold has been on a strong run, rising for eight straight weeks and reaching a new record of over $2,950 per ounce. However, it pulled back slightly on Friday. Gold’s rally has been driven by concerns over Trump’s tariff plans and geopolitical uncertainty. Investors are also watching his stance on Ukraine, which could increase instability in Europe.
Forex & U.S. Dollar
The British pound hit a two-month high and remains one of the best-performing currencies this year. Strong economic data, including a solid labor market, supported its gains.
Meanwhile, the U.S. dollar weakened for the third straight week, reaching a two-month low. Investors worry that the Federal Reserve may need to cut interest rates more than expected due to recent weak economic data. U.S. housing starts fell nearly 10% in January, and existing home sales dropped 4.9%. Consumer sentiment also declined by nearly 10%, reflecting growing concerns about the economy.
Takeaway for Investors
This week was a reminder that markets can change quickly. Economic data, corporate earnings, and geopolitical developments can all influence trends. Investors should stay informed and focus on long-term strategies rather than reacting to short-term swings.