US stock indices open lower on Friday; Nasdaq Index down 1.15%; S&P 500 Index down 0.81%; Dow Index down 0.84%

US stock indices open lower on Friday; Nasdaq Index down 1.15%; S&P 500 Index down 0.81%; Dow Index down 0.84%

US Stock Indices Open Lower Amid Tariff Uncertainty and AI Sector Volatility

US stock indices opened lower on Friday, with the Nasdaq Composite down 1.15%, the S&P 500 slipping 0.81%, and the Dow Jones Industrial Average falling 0.84% [^NUMBER]. The decline reflects growing investor unease over President Donald Trump's abrupt announcement of a 15% baseline tariff hike on imports, which has reignited global trade tensions. The European Union swiftly rejected the move, emphasizing that "a deal is a deal" and urging clarity from Washington.

The tariff-driven uncertainty follows the Supreme Court's recent invalidation of sweeping Trump-era tariffs, which had briefly buoyed market sentiment earlier in the week according to market reports. However, the renewed focus on protectionism has shifted investor attention away from AI-driven growth stocks, which have underperformed in recent weeks. Tech-heavy indices like the Nasdaq are on track for their worst month since March 2026, as concerns mount over AI's disruptive impact.

Nvidia (NVDA), a key AI sector bellwether, continued to weigh on the market after slipping 5.5% on Thursday, despite strong fourth-quarter results. Analysts attributed the decline to broader anxieties about AI adoption, including hyperscalers' capital expenditure risks. Other tech and software firms, including IBM, Accenture, and Cognizant, also faced selling pressure as investors reassessed valuations.

Meanwhile, sectors perceived as less exposed to AI volatility—such as energy, materials, and consumer staples—have outperformed. The energy sector, in particular, has surged 23% year-to-date, drawing investors seeking stability amid market rotation. Analysts suggest diversification strategies, including equal-weighted indexes and international exposure, to mitigate risks from concentrated tech positions.

Looking ahead, markets will closely watch the January producer price index (PPI) data, with economists forecasting a 0.3% rise in headline inflation. As uncertainty persists, investors are advised to maintain balanced portfolios and avoid overreacting to short-term volatility, according to strategists at Wells Fargo and Piper Sandler.