Investor sentiment has taken a hit following US President Donald Trump’s recent comments on tariffs and artificial intelligence (AI). The stock market, which was previously buoyed by Trump’s perceived friendliness to the market, has seen a significant downturn.
Trump announced plans for additional 25% tariffs on all aluminum and steel imports into the US, coming on top of existing levies. This news sent stocks tumbling. Additionally, the announcement that Nippon Steel will invest in US Steel instead of buying it also contributed to the decline.
The impact of AI on the stock market is also a concern. DeepSeek’s claim that its training required significantly less funding than US AI models have thrown Big Tech’s investments and stock valuations into question. Despite this, major tech companies such as Meta, Amazon, Alphabet, and Microsoft are planning to spend over $300 billion on AI and data centers.
In other news, consumer prices in China rose 0.5% in January, while producer prices dropped 2.3%. Electric car companies in China are offering discounts and interest-free loans to boost sales amid a hotly contested industry.
The US labor market also saw a mixed report, with the economy adding 143,000 jobs but nonfarm payrolls dropping from an upwardly revised 307,000 in December. The unemployment rate edged down to 4% from 4.1%, and average hourly earnings rose stronger than expected.
Asian markets rose as US stocks slumped, while US indexes ended lower after a losing day on Friday. The spending of billions on AI by major tech companies has raised questions about its impact on the market.
Finally, despite efforts to reduce coal consumption globally, demand for the fuel remains strong in some countries, with US exports rising steadily and expected to breach another high in 2024.
Source: https://www.cnbc.com/2025/02/10/cnbc-daily-open-investors-appear-less-enthusiastic-over-trump-and-ai.html