US market traded on a bearish note after White House clarified over reports that claimed President Donald Trump was delaying tariffs till March. Dow Jones, S&P 500, and Nasdaq Composite fell by 0.5% to 1% eventually on Friday, January 31. The performance also comes ahead of India's Budget for fiscal year 2025-26. Indian stock market is among the top 10 markets in the world. The latest Economy Survey of 2025 from India has highlighted the uncertainty in the global economic order.
US Market:
Dow Jones: The Dow Jones Industrial Average or DJIA closed at 44,544.66, lower by 337.47 points or 0.75% on Friday.
Nasdaq Composite Index: The tech-heavy index slipped by 54.31 points or 0.3% to close at 19,627.44, after hitting an intraday low of 19,575.21.
S&P 500: This index dropped by 30.64 points or 0.5% to finish at 6,040.53, after hitting an intraday low of 6,030.93.
What Impacted the US Stock Market?
As per Trading Economics data, US stocks ended the week with a roller-coaster ride after the White House denied reports that President Trump was delaying tariffs by a month and confirmed his plans to impose tariffs on Mexico, Canada, and China this weekend, erasing earlier gains in equities. The S&P 500 dropped 0.5%, the Dow trimmed 310 points, while the Nasdaq 100 edged lower.
Trading Economics data further highlighted that Nvidia lost 3.7% amid lingering concerns that a Chinese AI startup could impact tech valuations, while Apple shed 0.7% despite reporting a 4% revenue increase and delivering optimistic guidance. Additionally, Exxon Mobil and Chevron fell 2.5% and 4.6%, respectively, after reporting their results. On a positive note, AbbVie rose 4.7% after its forecast 2025 earnings were above Wall Street's average expectation as two key medicines gained ground. Meanwhile, the market barely budged after the US Core PCE inflation gauge met estimates, with markets continuing to bet on two rate cuts by the Fed this year.
Global Uncertainty Warning:
India's Economic Survey 2025 said that the global economy exhibited steady yet uneven growth across regions in 2024. A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand. In contrast, the services sector performed better, supporting growth in many economies. Inflationary pressures eased in most economies. However, service inflation has remained persistent. Although commodity prices have stabilised, the risk of synchronised price increases persists.
Further, the survey added, with growth varying across economies and last-mile disinflation proving sticky, central banks may chart varying paths of monetary easing. This will lead to uncertainty over future policy rates and inflation trajectories. This apart, geopolitical tensions, ongoing conflicts, and trade policy risks continue to pose significant challenges to global economic stability.
Madan Sabnavis, Chief Economist at Bank of Baroda said, the economic survey " does highlight the uncertainty in the global economic order and recommends further reforms, especially in terms of ease of doing business to take the economy ahead. It is positive of consumption and investment picking up in the second half of FY25 which should stabilise further in FY26."
FM Nirmal Sitharaman will present her eighth budget on February 1, 2025.
Krishna Appala, Sr. Research Analyst, Capitalmind Research. said, the budget comes at a critical juncture, with weak consumption, a depreciating rupee, and global uncertainties dampening market sentiment. The Rs 11.1 lakh crore capex target for FY25 is likely to fall short by 10-12%, but a strong push on execution could still drive economic momentum. Meanwhile, the RBI's recent liquidity interventions-injecting Rs 600 billion into banks while selling $5 billion-aim to stabilize the rupee and support growth. With the MPC meeting set for February 5-7, the odds of an immediate rate cut remain low, especially after the US Fed decides to hold rates steady.
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