Stock market rises but posts weekly loss. Jobs report keeps Fed sidelined. Eyes on tariffs
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U.S. stocks closed higher despite fewer-than-expected jobs added in February and an unexpected uptick in the unemployment rate.
Nonfarm payrolls increased by 151,000 jobs in February, less than the consensus forecast of 170,000 from economists polled by Dow Jones. The unemployment rate edged up a tenth to 4.1%, above expectations for the rate to remain steady at 4.0%.
The broad S&P 500 index closed up 0.55%, or 31.68 points, to 5,770.20; the blue-chip Dow edged up 0.52%, or 222.64 points, to 42,801.72; and the tech-heavy Nasdaq rose 0.7%, or126.96 points, to 18,196.22. The benchmark 10-year yield rose to 4.309%.
The data were not as strong as expected, but economists don't think it moves the needle for the Federal Reserve in deciding whether it should continue to lower rates later this year.
"The February payrolls data wasn't soft enough to change the Fed's calculus, but we are eager to hear how they are thinking about the bigger picture," said Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management. "Recently, there have been a handful of data points pointing towards a growth slowdown, and we think the Fed's bias is still tilted towards easing."
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Recent data that suggested economic slowing include declines in consumer confidence and households struggling to spend beyond necessities.
Fed Chair Jerome Powell reiterated at the U.S. Monetary Policy Forum that he was in no hurry to move rates as the Fed seeks more clarity on Trump's policies.
Stock gains on Friday were limited due to the uncertain tariff picture. President Donald Trump's back-and-forth rhetoric on tariffs is creating uncertainty and anxiety, investors say. This week, alone, he slapped a 25% tariff on Canadian and Mexican goods and an additional 10% tax on Chinese goods only to walk some of that back in bits and pieces later. First, he exempted the auto sector for a month from the 25% levy and then expanded that to everything covered under the United States–Mexico–Canada Agreement.
"Uncertainty about the US' trade policy may keep investors guessing, with Trump's reciprocal tariffs for now set to come into effect in early-April as well," said Diana Iovanel, senior economist in the Global Markets team at Capital Economics.
Trump's whiplash so far has pushed the three major U.S. stock indexes lower this week, with the S&P 500 posting its worst week since September. The Nasdaq fell into correction territory on Thursday, meaning it closed at least 10% off its all-time high.
Tariffs and inflation
Treasury Secretary Scott Bessent continues to say he doesn't believe tariffs will add much to inflation. In an interview before the jobs report, he said on CNBC that tariffs would lead to a 'one-time price adjustment' rather than long-term inflation.
Bessent also said the administration was 'not getting much credit' for areas where costs have fallen since Trump's inauguration, such as oil prices and mortgage rates.
He also acknowledged the economy may be weakening a bit, but that's an expected adjustment. 'Could we be seeing that this economy that we inherited starting to roll a bit? Sure," he said. "And look, there's going to be a natural adjustment as we move away from public spending to private spending."
Corporate news
Broadcom shares jumped 8.64% after the chipmaker reported a surge in AI revenue for last quarter. Earnings beat forecasts, too.
Walgreens agreed to go private in a deal with private equity firm Sycamore Partners in a deal with an equity value of around $10 billion. Sycamore will pay $11.45 per share in cash for the drugstore chain and another possible $3 more per share in the future from sales of Walgreens' primary-care businesses, including Village Medical, Summit Health and CityMD. Walgreens shares rose 7.45%.
Hewlett Packard Enterprise said it will cut about 5% of its global workforce and warned tariffs would weigh on its annual profit. Shares dropped to the lowest level in about a year and closed down 11.97%.
Gap said sales were stronger than expected during the holiday quarter. The stock rallied 18.66%.
Costco's quarterly revenue missed expectations, but growth in same-store sales was higher-than-expected. Shares fell 6.07%.
Cryptocurrency
Trump signed an executive order on Thursday to create a strategic bitcoin reserve funded exclusively with bitcoin seized in criminal and civil forfeiture cases, White House crypto and artificial intelligence czar David Sacks wrote in a post on X.
The executive order also creates a U.S. digital asset stockpile of other confiscated crypto, managed by the Treasury Department.
Bitcoin was last down 3.75% at $86,592.72, dropping back below the key, round level of $90,000.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
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