Magnificent Seven Slip, Inflation Fears Grip Consumers, Gold Hits Record Highs: This Week In The Markets

It's been a cautious week on Wall Street as earnings from mega-cap tech companies prompted investors to reassess their high expectations for future growth.

Alphabet Inc. GOOG GOOGL and Amazon.com Inc. AMZN were the latest among Magnificent Seven stocks to fall short of lofty guidance forecasts, weighing on the broader market. Drugmaker Eli Lilly Co. LLY and financial stocks provided a cushion, helping offset some of the weakness in mega-cap tech.

On the macroeconomic front, January’s labor market data sent mixed signals. Nonfarm payrolls rose by 143,000, a sharp slowdown from December's 307,000 and well below economist forecasts of 170,000. Yet the unemployment rate edged lower and wages grew at a faster-than-expected pace.

A warning sign emerged Friday when the University of Michigan's consumer sentiment index revealed an unexpected decline in February, with the report highlighting an "unusually large" increase in year-ahead inflation expectations. The survey attributed much of this anxiety to higher tariffs under the Trump administration.

Gold, as tracked by the SPDR Gold Trust GLD, surged to new all-time highs as investors sought protection against inflation and policy uncertainty. The precious metal repeatedly broke above $2,850 per ounce, marking its sixth consecutive week of gains and reinforcing its status as the go-to safe-haven asset amid an environment of economic risks.

Geopolitical developments also shaped market sentiment. During a meeting with Israeli Prime Minister Benjamin Netanyahu, Trump outlined a new vision for Gaza, suggesting the United States could “take over” and transform it into the "Riviera of the Middle East" while relocating Palestinians to Jordan and Egypt.

The U.S. Treasury announced fresh measures aimed at sanctioning Iran's oil export network to China as part of Washington's broader strategy to exert “maximum economic pressure” and prevent Iran from advancing its nuclear program.

On Friday, Trump hinted at plans to announce reciprocal tariffs as early as next week.

Ford's Outlook Disappoints

Ford Motor Co. F’s fourth-quarter earnings beat expectations, but its weak 2025 outlook and projected $5 billion-$5.5 billion losses in the electric vehicle segment sent the stock to the lowest level since January 2021. Analysts remain cautious, citing profitability concerns and competitive pressures in the EV market.

Inflation Expectations Spike

U.S. consumer sentiment fell to 67.8 in February, per the University of Michigan survey, missing forecasts. Inflation expectations rose to 4.3%, the highest since November 2023.

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Image created using artificial intelligence via Midjourney.