Market Enthusiasm for Trump and AI Wanes Amid Economic Shifts

CNBC Daily Open: Markets aren't as enthusiastic over Trump and AI as they used to be

While the main characters of the stock market remain the same as they were in December, they are steering markets in a different direction. New steel and aluminum tariffs Trump will announce on Monday additional 25% tariffs on all aluminum and steel imports into the U.S., according to comments to reporters on Sunday. Those will come on top of already existing levies. Separately, Trump said on Friday at a news conference with Japanese Prime Minister Shigeru Ishiba that Nippon Steel will invest in U.S. Steel, giving up its attempt to buy it. China's prices send mixed signals Consumer prices in China spiked 0.5% in January on an annual basis, according to the country's National Bureau of Statistics on Sunday. The figure is higher than the previous month's 0.1% increase and the 0.4% expected in a Reuters poll, assuaging some worries over deflation in China's economy. However, producer prices dropped 2.3% in January year on year -- the same degree as December and steeper than the 2.1% estimate -- for their 28th straight month of declines. Uneven report for U.S. labor market The U.S. economy added 143,000 jobs in January, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls for the month dropped from an upwardly revised 307,000 in December was and below the Dow Jones 169,000 estimate. However, the unemployment rate edged down to 4% from 4.1% the prior month. Average hourly earnings in January were stronger than expected, coming in at 0.5% for the month compared with the 0.3% forecast. European markets outperform U.S. All major U.S. indexes ended last week lower after a losing day on Friday, when the S&P 500 lost 0.95%, the Dow Jones Industrial Average slid 0.99% and the Nasdaq Composite fell 1.36%. Stocks retreated after Trump mentioned the possibility of reciprocal tariffs on trade partners. Europe's regional Stoxx 600 index closed 0.38% lower, but ended the week up 0.54%. Shares of Porsche and L'Oreal fell amid weak guidance and disappointing earnings, respectively. Spending billions on artificial intelligence SoftBank is close to finalizing a $40 billion primary investment in OpenAI at a $260 billion pre-money valuation, sources told CNBC's David Faber. The cost efficiency of DeepSeek doesn't seem to deter Big Tech: Meta, Amazon, Alphabet and Microsoft have announced plans to spend a combined $320 billion on AI and data centers. Demis Hassabis, the CEO of Google DeepMind, said on Friday that while DeepSeek is "the best work" he's seen from China, "there's no actual new scientific advance." [PRO] Inflation in focus this week The consumer and producer price indexes for January, out Wednesday and Thursday respectively, will be especially important to investors. January's jobs report showed a higher-than-anticipated wage growth and the University of Michigan consumer survey revealed that respondents increased their expectations of the inflation rate a year to 4.3%, a one percentage point jump from January.

CNBC Daily Open: Enthusiasm over Trump and AI appears to be waning

While the main characters of the stock market remain the same as they were in December, they are steering markets in a different direction. New steel and aluminum tariffs Trump will announce on Monday additional 25% tariffs on all aluminum and steel imports into the U.S., according to comments to reporters on Sunday. Those will come on top of already existing levies. In a separate steel-related development, Trump said on Friday at a news conference with Japanese Prime Minister Shigeru Ishiba that Nippon Steel will invest in U.S. Steel, giving up its attempt to buy it. EV price cuts in China amid mixed price signals Consumer prices in China spiked 0.5% in January on an annual basis, according to the country's National Bureau of Statistics on Sunday. The figure is higher than the previous month's 0.1% increase and the 0.4% expected in a Reuters poll. However, producer prices dropped 2.3% in January year on year -- the same degree as December and steeper than the 2.1% estimate -- for their 28th straight month of declines. Meanwhile, electric car companies in China are offering discounts and interest-free loans to boost sales amid a hotly contested industry and sluggish consumer sentiment in the country. Uneven report for U.S. labor market The U.S. economy added 143,000 jobs in January, the Bureau of Labor Statistics reported Friday. Nonfarm payrolls for the month dropped from an upwardly revised 307,000 in December was and below the Dow Jones 169,000 estimate. However, the unemployment rate edged down to 4% from 4.1% the prior month. Average hourly earnings in January were stronger than expected, coming in at 0.5% for the month compared with the 0.3% forecast. Asian markets rise as U.S. slumps All major U.S. indexes ended last week lower after a losing day on Friday, when the S&P 500 lost 0.95%, the Dow Jones Industrial Average slid 0.99% and the Nasdaq Composite fell 1.36%. Stocks retreated after Trump mentioned the possibility of reciprocal tariffs on trade partners. By contrast, Asia-Pacific markets started the week higher. Hong Kong's Hang Seng Index added around 1.8%. Singapore's Straits Times Index hit an all-time high, lifted by shares of Singapore's largest bank DBS Group Holdings, which jumped 2.6% and touched a new record. Spending billions on artificial intelligence SoftBank is close to finalizing a $40 billion primary investment in OpenAI at a $260 billion pre-money valuation, sources told CNBC's David Faber. The cost efficiency of DeepSeek doesn't seem to deter Big Tech: Meta, Amazon, Alphabet and Microsoft have announced plans to spend a combined $320 billion on AI and data centers. Demis Hassabis, the CEO of Google DeepMind, said on Friday that while DeepSeek is "the best work" he's seen from China, "there's no actual new scientific advance." [PRO] Inflation in focus this week The consumer and producer price indexes for January, out Wednesday and Thursday respectively, will be especially important to investors. January's jobs report showed a higher-than-anticipated wage growth and the University of Michigan consumer survey revealed that respondents increased their expectations of the inflation rate a year to 4.3%, a one percentage point jump from January.