Worries about inflation and weak consumer sentiment dragged to stocks Friday as President Trump’s tariffs loomed, Wall Street has been trying to assess the way forward of the U.S. economy.
The S&P 500 fell 2%, one of the worst days since Trump was elected. The decline range dropped from earlier in the day, aggravating concerns about price pressures, as the Fed's preferred inflation measure was higher than economists expected.
Friday's downturn pulled the S&P 500 to its fifth loss in the past six weeks. March is expected to be the worst month for stocks since September 2022; sales waves in recent weeks have left the S&P 500 S&P 500 below its February 19 peak of more than 10%, and the downturn believes the market is “corrected”. Wall Street sentiment is under concern that President Trump's tariffs and trade wars could rise sharply, stopping consumers and forcing the economy to fall into recession.
In the second half of this month, the market returned to a certain level of calm, with some losses mainly benchmarking. But until investors seek clarity, uneasiness about tariffs may continue to fuel the daily swing.
“It seems like in the market right now, it's going to be more paranoid that you won't kill,” said Matt Lloyd, chief investment strategist at Advisors Asset Management. “You're thinking, 'The next one will be a stupid one.'”
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Data released on Friday increased Wall Street's anxiety about inflation and consumer sentiment. The personal consumption expenditure price index climbed 2.8% in February from a year ago after divesting volatile food and energy items, faster than January's annual pace. Data show that even before Mr. Trump's trade war latest escalation, basic price pressures have intensified.
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Investors also assessed the latest signs that consumers are increasingly anxious about the economic outlook. Consumer sentiment fell 12% in March, as expectations from now onwards start, the highest level since November 2022, according to data released by the University of Michigan. Earlier this week, the conference committee reported that consumer confidence fell to its lowest level since January 2021 this month.
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Uncertainty over Mr. Trump's tariffs and their potential inflationary impact continues to be imminent, limiting the swing caused by a week's tariffs. Mr. Trump announced on Wednesday that he plans to impose a 25% tariff on imported cars and certain parts starting next week. News of an upcoming announcement of automatic tariffs cancelled major U.S. stock indexes on Wednesday, although responses in the wider market were relatively weakened Thursday. Analysts say investors hope to make it clear next week that Mr. Trump’s reciprocity tariffs were intended to match tariffs imposed by other countries on U.S. goods, which would take effect.
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Stocks of the big Detroit automaker built some vehicles in Canada and Mexico and expanded their losses on Friday. Stocks for general electric motors fell more than 1% on the day, while Ford's stock fell nearly 2%, and Stellantis's stock ended up with 4% of the stock.
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Nasdaq's heavy Nasdaq composite fell 2.7% on Friday, lowering as stocks of several tech giants fell. Alphabet's stock fell nearly 5%, with Amazon's stock price exceeding 4%. Investors are closely monitoring Coreweave’s IPO; cloud computing company made its debut on Nasdaq on Friday, becoming the first major AI company to be publicly publicly. The company's stock traded at $39 on its first day of opening, a slight drop from the already scaled IPO price, a focus on Wall Street investors on the economy and Coreweave's business model.
