A look at the day ahead in U.S. and global markets from Mike

Dolan

The S&P500 stock benchmark plunged into the red for the

year this week as an Nvidia ( NVDA )-led selloff, economic slowdown fears

and re-ignited trade war fears jarred while the dollar surged

anew.

Following Big Tech megacaps and small cap indexes

into negative territory for 2025, the S&P500 plunged 1.5% on

Thursday as U.S. jobless claims saw their biggest weekly jump in

five months and President Donald Trump warned more tariff rises

are coming as soon as next week.

Artificial intelligence darling Nvidia ( NVDA ) led the

slide, tumbling 8.5% and losing $274 billion in stock market

value after the chip giant's latest earnings beat failed to

impress Wall Street as its margins missed estimates.

The retreat pulled the entire Philadelphia chip index

down 6% and dragged on the entire market.

As February comes to a close on Friday, futures pointed to

only a modest rebound ahead of today's bell.

Tech aside, the broader economic and trade picture is

darkening.

On Thursday Trump said his proposed tariffs of 25% on

Mexican and Canadian goods would take effect on March 4 along

with an extra 10% duty on Chinese imports, defying expectations

of those who hoped for a further delay in the levies. And he

said wider 'reciprocal' tariffs were coming in April.

Stocks around the world tumbled 0.5% on

Friday as a result.

Beijing accused the United States of exerting "tariff

pressure and blackmail" by using fentanyl trafficking as an

excuse for a second 10% tariff hike. Chinese stocks and the yuan

fell, with Hong Kong stocks losing more than 3%.

European countries said they would retaliate

proportionately, with European stocks falling back and

the euro hitting two week lows ahead of another expected

cut in European Central Bank interest rates next week.

Canada's dollar fell to its lowest since February 4

and wider U.S. dollar index hit two week highs.

The risk-off moves gathered steam during the trading

session, with crypto tokens among the biggest losers for the day

as Bitcoin slid more than 5% to a low of $79,125.53 - its

weakest level since November 11.

The combination of creeping jobless rises, in part due to

ongoing government worker cuts as well as weather-related hits,

and jangled consumer and business confidence is unnerving

investors about what had been seen as a 'Teflon' economy.

And with uncertainties mounting about tariffs and government

budget cuts, business planning is becoming difficult and

potentially putting activity and investment spending on hold.

Fears about the wider global economic hit from a trade war

are also starting to drag on domestic U.S. firms. Some 41% of

S&P500 firms' revenues are sourced overseas and 43% of all U.S.

imports coming from Canada, Mexico and China.

Friday's data diary focussed back on inflation, with the

January personal consumption expenditures (PCE) inflation

reading in focus as traders watch the Federal Reserve's favored

gauge closely.

But with slowdown fears now a significant concern, other

readouts may start to take precedence.

Despite lingering inflation concerns, the stock market swoon

and jobless flag have forced futures to nudge up bets on Fed

easing further. They now see a 90% chance of another Fed cut by

June and price some 60 basis points of easing by yearend.

Ten-year Treasury yields fell to new year lows

of 4.22% on Friday, with two-year yields plumbing lows near 4.0%

for the first time since before November's election.

Elsewhere, ECB rate cut hopes were encouraged by the latest

euro zone inflation reports for February, which showed both

French and Italian annual inflation coming in below forecast and

well below the central bank's 2% target.

What's more, euro zone consumers lowered their near-term

inflation expectations last month, an ECB survey showed.

Japanese stocks followed the tech-led selloff,

meantime, and lost almost 3% to hit a five-month low and the yen

fell back as Tokyo inflation readings came in below

forecast too - an important marker ahead of a possible Bank of

Japan rate rise next month.

Key developments that should provide more direction to U.S.

markets later on Friday:

* US January personal consumption expenditures (PCE) inflation

gauge, personal income and spending, goods trade balance,

retail/wholesale inventories, Kansas City Federal Reserve

February service sector survey, Chicago Feb business survey;

Canada Q4 GDP

* Chicago Fed President Austan Goolsbee speaks

* Ukraine President Volodymyr Zelenskiy meets US President

Donald Trump in Washington

* US corporate earnings: AES Corp

(By Mike Dolan, editing by Ros Russell

[email protected])