FX.co ★ US Stocks Tumble on Inflation Concerns and Trade Disruptions

On Friday, U.S. stock markets experienced a significant downturn driven by heightened inflation concerns and escalating uncertainty surrounding trade policies. The S&P 500 declined by 2%, the Dow Jones Industrial Average dropped by 715 points, and the Nasdaq 100 fell by 2.7%. Leading the downturn were major technology firms: Alphabet, Amazon, and Meta each experienced declines exceeding 4%, while Microsoft saw a 3% drop. These inflationary anxieties were exacerbated by the University of Michigan's March consumer sentiment report, which highlighted the highest long-term inflation expectations since 1993. Compounding the issue, the core Personal Consumption Expenditures (PCE) price index—favored by the Federal Reserve as an inflation benchmark—rose by 2.8% in February, surpassing expectations. Additionally, consumer spending saw an increase of 0.4%. Investors are wary of potential trade disturbances as a 25% automobile tariff imposed by the Trump administration is set to be enforced next week, raising fears of retaliatory actions from major trading partners. Over the past six weeks, the S&P 500 and Nasdaq have recorded losses of over 1% and 2% respectively, marking their fifth weekly decline, while the Dow Jones registered a 0.8% decrease.