(Updates to afternoon US trading)

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US stocks mixed, with Nasdaq up 0.5%

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Dollar gains as currency markets brace for Canada, Mexico

tariffs

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Oil prices tick down

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Apple ( AAPL ) stock dips in choppy trading after earnings

By Harry Robertson and Lawrence Delevingne

LONDON/BOSTON, Jan 31 (Reuters) - Wall Street stocks

were mixed and the dollar gained on Friday at the end of a

volatile week for markets, with sentiment buoyed by an in-line

U.S. inflation report but restrained by looming trade fights.

The U.S. will impose 25% tariffs on Canada and Mexico, along

with 10% on China, White House spokeswoman Karoline Leavitt

said, but she declined to say whether there will be exemptions.

The U.S. S&P 500 stock index was flat and on track to end

the week slightly down, while the tech-heavy Nasdaq

climbed 0.5%, also set to end the week slightly lower.

The Nasdaq had dropped 2.9% on Monday as the surging popularity

of cheap Chinese AI model DeepSeek shook investor confidence in

U.S. tech stocks and sent chipmaker Nvidia ( NVDA ) plunging

17%.

But earnings reports and forecasts this week from Meta

and Tesla have helped sentiment recover

somewhat.

Apple ( AAPL ) initially added to the cautiously optimistic mood

late on Thursday when it forecast relatively strong sales

growth, but its stock was last down about 0.4% in Friday

trading.

European shares closed at a record high, led by technology

stocks, as earnings from companies such as Novartis and

Hexagon overshadowed concerns over economic recovery.

TARIFFS LOOM

In currency markets, the dollar index, which measures the

greenback against a basket of currencies including the yen and

the euro, rose 0.3%

Options contracts showed investors were preparing for potential

swings in the Canadian dollar and Mexican peso .

The Canadian dollar was flat and the peso was 0.1% higher in

choppy trading.

Trump is threatening punitive duties if Canada and Mexico do

not take stronger action to halt the flow of the deadly opioid

fentanyl and precursor chemicals into the United States, as well

as illegal migration.

"There is big market complacency in terms of the manner that

the market could digest the tariffs," said Michael Nizard,

multi-asset chief investment officer at Edmond de Rothschild.

The euro and sterling both declined about 0.2% versus the dollar

.

Data on Friday showed the U.S. personal consumption

expenditures price index rose 0.3% last month after an unrevised

0.1% gain in November, in line with economists' expectations.

"Disinflation continues, and should continue given

underlying trends," David Alcaly, lead macroeconomic strategist

at Lazard Asset Management, said in an email.

"Concerns about recent bumpiness are overblown and have more

to do with the potential for inflationary policy change like

tariffs than with current conditions."

The figures also showed consumer spending surged, briefly

pushing up 10-year Treasury yields, which were last up 2.3 basis

points to 4.535%.

Data on Thursday showed U.S. economic growth slowed in the

fourth quarter, but remained robust enough for investors to

expect the Federal Reserve - which held interest rates on

Wednesday - to lower borrowing costs only gradually this year.

Euro zone short-dated government bond yields were on track to

record their biggest weekly drop in months, after a raft of weak

economic data led traders to ramp up their bets on future rate

cuts from the European Central Bank. The ECB cut rates on

Thursday and signaled more easing was coming.

Oil prices edged higher ahead of the new tariffs against Canada

and Mexico. U.S. crude rose 0.54% to $73.11 a barrel and

Brent climbed to $76.92 per barrel, up 0.07% on the day.