• Closing the week in the red. Major U.S. stock indexes ended down Friday. Investors may have been frazzled by confirmation from the White House that President Donald Trump planned to implement new tariffs on Canada, Mexico and China over the weekend. Every major index closed in the red.
• Yields closed at 1-week highs. As confirmation on tariffs on Mexico, Canada, and China beginning on Saturday, yields flew to their highest closing levels in a week. Two- and 10-year yields respectively ended at 4.235% and 4.566% on Friday, while the 30-year rate finished at 4.812%. Those are the highest closing levels since Jan. 24, according to Dow Jones Market Data. White House press secretary Karoline Leavitt stated that the U.S. will be imposing a 25% tariff on goods imported from Canada and Mexico along with a 10% tariff on goods from China beginning on February 1. 
• The Vix fear gauge jumped. The Cboe Volatility Index, which trades under the ticker symbol VIX, was up more than 6% in Friday afternoon trade at around 16.8, according to FactSet data.
• The January barometer. The S&P 500 finished down on Jan. 31, but the broad market ended up 2.6% for the month. The January Barometer is a theory that says the investment performance of the S&P 500 in January is representative of the predicted performance of the entire year. According to the theory, if stocks are higher in January, they should be higher for the year, and if they are lower in the first month, they'll be lower for the year.
• Inflation came in line with expectations: Headline PCE inflation rose by 0.3% in December and 2.6% on an annual basis, both in line with expectations. 
• 3 of the Mag 7 reported. Three of the "Magnificent 7" companies reported last week. Meta and Microsoft exceeded analyst expectations on both revenue and earnings per share, while Tesla missed on both measures.
• The U.S. economy is on a strong footing. The first preliminary estimate for fourth-quarter real GDP suggests the U.S. economy exited 2024 on strong footing, with real GDP growing at a 2.3% annualized rate, slightly below economist expectations for 2.4%.
• Fed holds rates steady. The Federal Open Market Committee (FOMC) concluded its January meeting last Wednesday, maintaining its target range for the federal funds rate at 4.25%-4.5%. The Fed also made no change to its balance-sheet-reduction program, known as quantitative tightening (QT). 

• Tesla (TSLA)
• Intel (INTC)
• Ford (F)
• Nvidia (NVDA)
• Rigetti Computing (RGTI)

Biggest Gainers

• Viavi Solutions (VIAV) +20.52%
• Atlassian Corp. (TEAM) +14.92%
• AST SpaceMobile (ASTS) +11.15%
• Franklin Resources (BEN) +10.37%
• Hims and Hers Health (HIMS) +9.78%

Biggest Losers

• Deckers Outdoor Corp. (DECK) -20.51%
• Walgreens Boots Alliance (WBA) -10.30%
• Olin Corp. (OLN) -8.87%
• PennyMac Financial Services (PFSI) -8.82%
• ResMed Inc. (RMD) -8.33%

Weekly Notables

Elon Musk Promises Robotaxis

"Teslas will be in the wild, with no one in them, in June in Austin," Tesla CEO Elon Musk said on Tesla's earnings call Wednesday. "This is not some far-off mythical situation. It's literally five, six months away." The electric vehicle maker had announced worse-than-expected fourth quarter earnings. Revenue for the EV maker slightly increased to $25.17 billion — up just 2% year over year. Automotive revenue fell to $19.8 billion from $21.56 billion in the year-ago quarter.
 

Microsoft Starts Layoffs with Immediate Effect

Microsoft has begun implementing performance-based layoffs, resulting in the immediate termination of affected employees without offering severance pay, according to Business Insider. In a letter addressed to impacted employees, Microsoft stated: “The reason(s) for the termination of your employment include your job performance not meeting the minimum standards and expectations for your position. Effective immediately, you are relieved of all job duties, and your access to Microsoft systems, accounts, and buildings will be revoked today. You are not to perform any further work on behalf of Microsoft.”

The Week Ahead

• Potential market moving catalysts this week: Monday: Construction Spending, ISM Manufacturing Index. Tuesday: Factory Orders. Wednesday: ADP Employment Change EIA Crude Oil Inventories, ISM Services MBA Mortgage Applications Index, Trade Balance. Thursday: Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Productivity-Preliminary, Unit Labor Costs-Preliminary. Friday: Average Workweek, Average Hourly Earnings, Consumer Credit, Nonfarm Payrolls, Unemployment Rate, University of Michigan Consumer Sentiment – Preliminary, Wholesale Inventories.
• Earnings on deck this week: IDEXX Laboratories Inc. (IDXX), Tyson Foods Inc. (TSN), Palantir Technologies (PLTR), NXP Semiconductors (NXPI), Clorox Co. (CLX), Merck & Co. (MRK), PepsiCo Inc. (PEP), Pfizer Inc. (PFE), Spotify Technology SA (SPOT), Alphabet Inc. (GOOGL), Advanced Micro Devices Inc. (AMD), Amgen Inc. (AMGN), Chipotle Mexican Grill (CMG), Walt Disney Co. (DIS), Boston Scientific Corp. (BSX), Uber Technologies (UBER), Arm Holdings PLC (ARM), MicroStrategy Inc. (MSTR), Eli Lilly & Co. (LLY), AstraZeneca PLC (AZN), Honeywell International (HON), ConocoPhillips (COP), Bristol-Myers Squibb Co. (BMY), Amazon.com Inc. (AMZN), Fortinet Inc. (FTNT), Pinterest (PINS), Expedia Group Inc. (EXPE), Fortive Corp. (FTV), Cboe Global Markets Inc. (CBOE), and Kimco Realty Corp. (KIM).