Stocks on Wall Street faced declines on Friday, while European markets managed to post modest gains as investors grappled with uncertainty surrounding U.S. President Donald Trump’s sweeping policy measures and the upcoming elections in Germany.
Since returning to the White House last month, Trump has imposed tariffs on key U.S. trading partners and launched an aggressive campaign to cut the federal workforce of 2.3 million employees. These moves have unsettled investors, fueling concerns over the pace and impact of his administration’s economic agenda.
"The recent market sell-off has been driven by the unpredictability of government policy changes," said Joshua Wein, portfolio manager at Hennessy Funds in Chapel Hill, North Carolina. "While spending cuts and layoffs were expected, the speed at which they are being implemented has created a level of uncertainty that the market hasn't encountered before."
Economic data released on Friday revealed that U.S. business activity had plunged to a 17-month low, signaling that both businesses and consumers were growing increasingly uneasy over the administration’s policy direction.
On Wall Street, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all registered losses, dragged down by declines in industrial, consumer discretionary, and energy stocks. The three major U.S. indexes were also poised to close the week in negative territory.
The Dow Jones Industrial Average slipped 0.85% to 43,799.85, while the S&P 500 dropped 0.57% to 6,082.56, and the Nasdaq Composite fell 0.69% to 19,823.69.
Across the Atlantic, European markets saw volatility throughout the week as investors awaited Sunday’s German elections. However, Europe’s broad Stoxx 600 rebounded 0.45%, reversing a two-day losing streak and positioning itself for a weekly gain.
Meanwhile, global equities also saw downward pressure, with MSCI’s world index slipping 0.23% to 881.69, leaving it down 0.25% for the week.
In Asia, stocks performed more robustly overnight. MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.45%, reaching its highest level since November 8.