Markets Mixed as Tariff Updates Alleviate Inflation Concerns

US stocks struggled to find direction on Friday, with the S&P 500 remaining mostly unchanged, while the Nasdaq rose by 0.40% and the Dow dropped 165 points. January retail sales declined by 0.90%, marking the biggest fall in a year and missing forecasts, raising concerns about consumer spending. Despite market volatility driven by policy changes, including new US tariff proposals and Ukraine peace talks, investor sentiment improved after a delay in reciprocal tariffs, leading to solid weekly gains.

In South Africa, the local stock market rose by 1% on Friday, supported by stronger performances from tech giants Naspers (JO:NPNJn) and Prosus (JO:PRXJn). Meanwhile, the rand weakened to R18.35/$ by 18h00 local time.

WTI crude oil futures fell 0.80%, closing at $70.7 per barrel on Friday and ending the week down 0.40%. Hopes for a peace agreement between Russia and Ukraine eased supply concerns. Peace talks, initiated by President Donald Trump after signals from Putin and Zelenskiy, raised the possibility of lifting sanctions on Russia, which could boost global energy supplies. However, the International Energy Agency indicated that Russian oil exports might continue through alternative routes.

European markets closed lower on Friday, retreating from record highs reached the previous session. The Eurozone’s STOXX 50 slipped 0.20% to 5 488 after hitting a 25-year high, while the pan-European STOXX 600 fell 0.30% to 552. Despite the decline, European stocks posted strong weekly gains as investors evaluated the chances of peace in Ukraine and the impact of potential US tariffs. Trump’s plans for country-specific reciprocal tariffs could be implemented as early as April.

In Asia, the Hang Seng surged 3.70% on Friday, its highest level in over four months, reversing losses from the previous session. Gains were broad-based, led by a 5.60% rise in the tech sector, driven by enthusiasm for China’s AI developments, particularly DeepSeek. The index climbed 7% for the week, marking its fifth consecutive weekly gain, supported by the People’s Bank of China’s commitment to flexible monetary policy and maintaining sufficient liquidity.

Conversely, Japan’s Nikkei fell 0.80% to 39 149 on Friday, ending a three-day winning streak as the yen strengthened overnight. The currency’s appreciation followed expectations of softer US inflation data and a delay in Trump’s tariff plans. A stronger yen typically weighs on Japan’s export sector and increases the cost of Japanese assets for foreign investors. Meanwhile, investors navigated a busy corporate earnings season, which has produced mixed outcomes.




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