In the early hours of the morning on the 8th Beijing time, the three major U.S. stock indexes broadly declined on Friday, marking an overall decrease for the week. The Dow Jones Industrial Average fell by 444.23 points, a decrease of 0.99%, closing at 44,303.40 points; the Nasdaq Composite Index dropped by 268.59 points, a decrease of 1.36%, closing at 19,523.40 points; and the S&P 500 Index decreased by 57.58 points, a decline of 0.95%, closing at 6,025.99 points. Overall, the three major indexes all saw varying degrees of decline this week, with the Dow down 0.54%, the S&P 500 down 0.24%, and the Nasdaq down 0.53%.
On the same day, Trump announced plans to implement reciprocal tariff measures against U.S. trade partners. Market analysts believe that this news heightened investor concerns, possibly indicating that Trump will comprehensively raise tariffs, further affecting the global trade landscape. During a meeting with Japanese Prime Minister Shigeru Ishiba, Trump mentioned that these reciprocal tariff measures would be announced next week, but did not disclose specific target countries. Trump repeatedly emphasized that the U.S. needs to reach more "fair" trade agreements with other countries, and this policy direction could introduce more uncertainty.
Additionally, the U.S. non-farm payroll report for January was released. Although the unemployment rate fell to 4%, below the market expectation of 4.1%, the increase in jobs was only 143,000, far below the expected 175,000, putting some pressure on the market. However, the growth in average hourly earnings exceeded expectations, with a month-on-month increase of 0.5%, intensifying investors' concerns about future inflationary pressure.
Analysts pointed out that although the overall increase in non-farm employment data was below expectations, the decline in the unemployment rate and the accelerated wage growth might indicate that the U.S. labor market is still in good health. This also helps to explain why the Federal Reserve has not been in a hurry to take further interest rate cuts after last year's cut. Federal Reserve official Kashkari stated that the current U.S. economy and labor market are good, and future interest rate policy still needs to observe more data.
Regarding the potential impact of Trump's tariff policy, investors expressed the need to wait and see, especially since U.S. government policies are not yet fully clear. Despite the poor performance of the non-farm payroll data, investors still need to focus on whether the Federal Reserve may maintain high interest rate policies in the future due to the unexpected wage increase, which may have a long-term impact on the U.S. stock market.
Overall, although the January non-farm payroll report did not meet market expectations, the drop in the unemployment rate and the accelerated wage growth may drive inflation worries, putting short-term pressure on the U.S. stock market. Analysts believe that unless there is a severe deterioration in the labor market or a significant rise in the unemployment rate, the Federal Reserve is unlikely to change its policy direction at present.
