U.S. markets today: With ‘Extreme fear’ taking hold, here’s what investors are watching

The final trading day of the week—and the month—will likely get off on shaky footing after Thursday’s sharp sell-off.

With Trump’s tariff shock and Nvidia’s slump rattling investors, there’s a palpable sense of anxiety in the markets, as evident in the CNN Business Fear & Greed Index.

One week ago, the closely watched indicator was at “neutral,” meaning the market wasn’t being driven primarily by either fear or greed. This week, however, it’s flashing “extreme fear.”

But is this 180-degree turn in sentiment justified? We probably won’t get the answer today, but investors will have plenty to consider after Friday morning’s opening bell.

Inflation data

Analysts have been paying close attention to inflation reports throughout this ongoing period of price hikes, in part because of the impact those numbers have on the future of interest rates.

Since Friday’s Personal Consumption Expenditures index is the Fed’s favored method of measurement, investors will be keeping an eye out for any important details when it surfaces.

The general consensus among economists is that the new report will show:

• The rate of inflation slowed last month
• A median annual rate of 2.6% to 2.8%
• The slowest rise in PCE inflation since June

Goldman Sachs senior economist David Mericle wrote that if reality aligns with those predictions, it “should reduce concerns from late last year about a lack of progress toward the 2% goal” set by central bankers.

Trump tariffs

No matter how rosy it might be, The January PCE index is unlikely to relieve the nagging uncertainty surrounding trade wars that are potentially brewing.

After President Donald Trump signaled this week that “in most cases” imports from EU nations would be hit with 25% tariffs, the S&P 500’s rally hit the skids.

Trump triggered a new level of concern, telling reporters that in addition to automobiles — an industry he has previously threatened to tariff — the added cost might also be imposed on “all other things” imported from the EU.

The president earlier indicated that similar tariffs on Mexico and Canada “will go forward” next week and authorized 25% tariffs on imported steel and aluminum beginning on March 12.

As those tariff deadlines creep closer and Trump teases expanding them even further, analysts are left to speculate what impact it all might have on the markets and the broader economy.

Odds and ends

In addition to the PCE index, February’s calendar concludes with several notable items on the agenda, including remarks by Chicago Fed President Austan Goolsbee, U.S. Census Bureau economic data, and January’s advance trade balance, wholesale inventories, and retail inventories.

And then there’s the elephant in the room: Nvidia.

The chipmaker released its generally strong Q4 earnings report after the closing bell on Wednesday, but investors responded with a decisive sell-off on Thursday.

AI remains a particularly tough sector for analysts to predict, as evidenced by the divide on Wall Street on where Nvidia is headed next. Its performance on Friday will give investors plenty to ponder throughout the day and over the weekend.