As investors assess multiple market-moving factors, U.S. stock futures pointed higher on Friday, fueled by the anticipation of fresh tariff threats from President Donald Trump and a busy week of earnings reports, including those from major tech giants like Apple. Market participants are also eagerly awaiting the release of crucial inflation data that could shape the Federal Reserve’s decisions for the rest of the year.
1. U.S. Stock Futures: A Slight Uptick
U.S. stock futures saw a modest increase on Friday morning, signaling a cautiously optimistic mood in the market. At 04:53 AM EST, the Dow futures had risen by 149 points (0.33%), S&P futures climbed by 26.50 points (0.43%), and Nasdaq 100 futures surged by 161.25 points (0.75%).
The previous trading day saw Wall Street’s major indexes edge higher, despite some volatility caused by President Trump’s tariff comments. Market participants remained on edge, assessing how Trump’s potential tariff actions would impact global trade and economic stability. Additionally, the positive earnings outlook from electric vehicle giant Tesla helped balance out some disappointing guidance from Microsoft, particularly regarding its cloud computing division.
2. Trump’s Tariff Threats Reignite Market Concerns
President Trump made waves on Thursday by reiterating his threat to impose a 25% tariff on imports from Canada and Mexico, scheduled to take effect on February 1. The tariffs, according to Trump, are a means to curb the flow of illegal migrants and fentanyl into the U.S. He also hinted at additional tariffs on China, although details remained sparse.
Further adding to the tension, Trump posted a warning on Truth Social, stating that the BRICS nations (Brazil, Russia, India, China, and South Africa) could face 100% duties if they attempt to replace the U.S. dollar as the world’s reserve currency. Markets have been on high alert over these tariff threats, as many economists warn that such moves could exacerbate inflationary pressures in the U.S. and lead to a broader trade conflict, making it harder for businesses and investors to navigate the uncertainty.
3. Apple’s Resilient iPhone Sales Outlook
Despite initial concerns surrounding Apple’s quarterly results, the tech giant’s shares surged in after-hours trading on the back of a brighter-than-expected forecast for its next quarter. Apple projected modest sales growth in the low-to-mid single digits for the fiscal second quarter, surpassing analysts’ expectations and indicating continued demand for its flagship product, the iPhone.
Although Apple reported a slight dip in iPhone sales during the holiday quarter, partly due to the absence of its latest AI features in certain markets, CEO Tim Cook remained optimistic about the future. The introduction of Apple Intelligence, a new suite of artificial intelligence tools, has already started to generate positive traction and boost sales. This cautious yet strategic approach to AI adoption has helped Apple weather some of the market turbulence that was sparked by a Chinese start-up’s low-cost AI model earlier in the week.
4. The December PCE Report: A Key Inflation Metric
The economic calendar is highlighted by the release of the Personal Consumption Expenditures (PCE) price index for December, set to hit the markets later on Friday. The PCE index is closely watched by the Federal Reserve, as it provides a key reading on inflation and consumer spending.
Economists are expecting the PCE to show an annualized inflation rate of 2.6%, up from 2.4% in November, while the month-on-month figure is predicted to rise by 0.3%. The core PCE, which excludes volatile food and energy prices, is anticipated to match November’s 2.8% year-on-year figure, with a slight uptick of 0.2% on a monthly basis.
The PCE data will provide crucial insights for Federal Reserve policymakers, who have been taking a wait-and-see approach to interest rate cuts amid lingering uncertainties in the global economy. The central bank’s future moves will largely depend on how inflation trends evolve over the coming months.
5. Crude Prices Edge Down, Set for Weekly Losses
Oil prices saw a small downtick on Friday, but traders are still wary about the broader impact of potential tariffs under President Trump’s renewed threats. By 04:53 AM EST, U.S. crude futures (WTI) had dropped 0.12% to $72.64 per barrel, while Brent crude rose 0.1% to $75.99.
Despite the minor recovery, oil prices are set to close the week with losses, with Brent expected to fall 1.6% and WTI set to decline 1.8%. However, the performance in January has been relatively strong, with Brent climbing around 3% for the month—its best monthly performance since June. WTI, on the other hand, is poised for a 2.1% gain, reflecting a mixed outlook for the energy sector.
6. Gold Nears Record Highs Amid Market Uncertainty
As global markets react to tariff threats and await key inflation data, gold prices are hovering near record highs. Investors have been flocking to the safe-haven asset, seeking refuge from the uncertainty surrounding President Trump’s trade policies and the upcoming economic reports.
With tensions surrounding trade tariffs and the potential for further economic disruptions, gold’s appeal as a store of value remains strong. Investors will be closely monitoring both the PCE inflation data and Trump’s tariff announcements, as these could significantly impact market sentiment and influence gold’s trajectory.
