(Updates to mid-afternoon)

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Consumer data shows jump in inflation expectations

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Nonfarm payrolls rose 143,000 in January vs 307,000 in

December

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Trump will announce new reciprocal tariffs next week

By Stephen Culp

NEW YORK, Feb 7 (Reuters) - Wall Street turned sharply

lower and benchmark Treasury yields jumped on Friday in the wake

of a mixed payrolls report, weak consumer sentiment data and

revived trade war jitters.

All three major U.S. stock indexes were lower, and the

selloff gathered velocity after a report that U.S. President

Donald Trump will shortly announce new tariffs.

The much-anticipated employment report showed the U.S. added

143,000 jobs in January, 53.4% fewer than December's upwardly

revised 307,000.

The report, distorted by annual benchmark revisions, along

with California wildfires and unusually cold weather, also

showed hotter-than-expected wage growth and a surprise dip in

the unemployment rate, to 4.0% from 4.1%.

"It's a mixed bag," said Rob Williams, chief investment

strategist at Sage Advisory Services in Austin, Texas, adding

the market was trying to digest the data.

"It was a miss on the headline, but the revisions over the

last two months were positive, and hourly earnings were also

up."

A separate report from the University of Michigan showed

consumer sentiment has darkened unexpectedly this month as

inflation expectations spiked.

The major indexes extended losses after Trump said he will

announce a new round of reciprocal tariffs on many countries

next week.

"Anytime you play a game of chicken which is very clearly

what Trump is doing," said Michael Green, chief strategist at

Simplify Asset Management in Philadelphia, "What if somebody

decides to go too far and we end up with a car crash?"

"Ultimately, what Trump is taking advantage of is a very

unbalanced negotiation at the end of the day, the customer is

always right," Green added. "And for the vast majority of the

world, the U.S. is the primary customer."

Late Thursday, Amazon ( AMZN ) reported disappointing growth

in its cloud computing segment and lower-than-expected first

quarter revenue and profit.

Similar disappointments from Microsoft ( MSFT ) and Alphabet

earlier in the week fueled suspicions the megacap tech

and tech-adjacent stocks are losing momentum.

The Dow Jones Industrial Average fell 383.16

points, or 0.86%, to 44,361.10, the S&P 500 fell 49.75

points, or 0.82%, to 6,033.69 and the Nasdaq Composite

fell 262.35 points, or 1.33%, to 19,528.56.

European shares followed U.S. stocks lower as investors grew

increasingly skittish over the possibility of an escalating

trade war, while a dire profit warning forecast from Porsche

further dampened risk appetite.

MSCI's gauge of stocks across the globe

fell 5.44 points, or 0.63%, to 869.85.

The STOXX 600 index fell 0.38%, while Europe's

broad FTSEurofirst 300 index fell 8.54 points, or 0.39%

Emerging market stocks rose 4.35 points, or 0.39%, to

1,106.60. MSCI's broadest index of Asia-Pacific shares outside

Japan closed higher by 0.41%, to 582.40, while

Japan's Nikkei fell 279.51 points, or 0.72%, to

38,787.02.

U.S. Treasury yields rose on the strength of upward

revisions to previous-month job adds and a surprise decline in

the unemployment rate, despite the job report's disappointing

headline number.

The yield on benchmark U.S. 10-year notes

rose 5.3 basis points to 4.491%, from 4.438% late on Thursday.

The 30-year bond yield rose 4.9 basis points to

4.6956% from 4.647% late on Thursday.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

rose 6.9 basis points to 4.277%, from 4.208% late on Thursday.

The dollar gained ground in choppy trading in the wake of

the jobs report, which appeared to support the U.S. Federal

Reserve's rationale for holding off on rate cuts for the time

being.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.35% to 108.05, with the euro down 0.47% at

$1.0332.

The Japanese yen weakened 0.05% against the greenback

to 151.51 per dollar.

Sterling weakened 0.18% to $1.2411.

The Mexican peso weakened 0.27% versus the dollar at

20.528.

The Canadian dollar strengthened 0.17% versus the

greenback to C$1.43 per dollar.

In cryptocurrencies, bitcoin gained 0.20% to

$97,017.23. Ethereum declined 1.61% to $2,665.18.

Oil prices advanced after new sanctions were imposed on

Iran's crude exports, but remained on track for their third

consecutive weekly decline due to tariff worries.

U.S. crude rose 0.55% to settle at $71.00 per barrel,

while Brent settled at $74.66 per barrel, up 0.50% on

the day.

Gold resumed its uphill climb as renewed trade jitters added

luster to the safe-haven metal.

Spot gold rose 0.14% to $2,860.52 an ounce. U.S. gold

futures rose 0.26% to $2,863.50 an ounce.