FX.co ★ Wall Street Sinks on Inflation and Trade Worries

US stocks continued their downward trajectory in the afternoon session, driven by growing inflation fears and increasing uncertainty surrounding trade policies. The S&P 500 fell by 1.8%, the Dow Jones plummeted by 700 points, and the Nasdaq 100 decreased by 2.7%. Leading the downturn were major technology companies, with Alphabet and Amazon seeing declines of over 4%, and Microsoft and Meta experiencing drops of 3.5%. Concerns over inflation were exacerbated when the University of Michigan’s final consumer sentiment index for March revealed the highest long-term inflation expectations since 1993. Additionally, the core Personal Consumption Expenditures (PCE) price index, regarded as the Federal Reserve’s favored measure of inflation, increased by 2.8% in February, exceeding predictions. Meanwhile, consumer spending saw a rise of 0.4%. Investors are preparing for possible further trade upheavals as the implementation of Trump’s 25% auto tariff is set for the following week, raising fears of retaliatory actions from significant trading partners. The S&P 500 and Nasdaq, which have decreased by over 1% and 2% respectively, are on course for their fifth weekly decline in six weeks, while the Dow is poised for a 0.8% reduction.