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Tariffs still matter, especially without jobs data.

The stock market's holding pattern broke into a sharp descent Friday after President Trump said he would not meet with Chinese leader Xi Jinping as scheduled in South Korea later this month. An escalation of tensions came with threats of "massive" tariffs on Chinese goods because of Beijing's latest restrictions on rare-earth materials.

The market had, for the most part, considered tariff turmoil settled. But the prospect of new levies merits new calculations, gaming out the costs of the president following through as the US-China detente comes undone.

Despite the various doses of recent AI developments that have kept the market surfing record highs, tariffs are returning to headlines in a government data vacuum.

As the Washington shutdown extends to its 10th day, the absence of last month's jobs numbers means other data sources and external events take on greater importance. The president threatening China is big news on its own, but investors and analysts don't have the cushion (or distraction) of other weighty catalysts to command their attention. Without data, the tariff threats feel devoid of key context that might tether their downside.

A fresh consumer sentiment survey carried the possibility of changing the narrative too. But Friday's data from the University of Michigan’s preliminary survey of consumers showed an unchanged outlook from the last fairly bleak reading.

The report also provided more evidence of the country's collective shrug over the government shutdown. Interviews with survey respondents offered “little evidence” that the stoppage has influenced people's views of the economy.

What people do claim to care about has not shifted, according to the survey. At the forefront of consumers' minds are pocketbook issues like high prices and weakening job prospects.

But even if consumers' outlook is locked in pessimism, not getting better but also not getting worse, there's little for the market to sink its teeth into — no added pressure to cut, no sudden signs of a revived economy. That's a perfect opportunity for the trade war to come out of dormancy and rattle a still-sensitive market that figured we were past all this.

Investors have been training their focus on an optimistic start to earnings season, another expected rate cut in less than three weeks, and more dealmaking and bullish excitement swirling around AI.

But threats of more tariffs are back, and with little else to soften the blow, so are the losses.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.

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