Concerns about inflation and weak consumer sentiment dragged down the stock market on Friday, as Wall Street keeps struggling to assess the path forward for the U.S. economy with the full impact of President Trump’s tariffs looming.
The S&P 500 tumbled 2 percent, marking one of its worst days since Mr. Trump’s election. The drop extended modest declines from earlier in the day, after the Federal Reserve’s preferred inflation measure came in hotter than economists had expected, intensifying worries about price pressures.
The downturn on Friday pulled the S&P 500 to its fifth weekly loss in the past six weeks. March is on track to be the stock market’s worst month since September 2022; waves of selling in recent weeks at one point left the S&P 500 more than 10 percent below its Feb. 19 peak, a downturn considered a market “correction.” Wall Street sentiment has been dampened by concerns that President Trump’s tariffs and a trade war could push prices sharply higher, discourage consumers and force the economy toward a recession.
Markets had regained a degree of calm in the second half of the month, with major benchmarks recouping some losses. But unease about tariffs is likely to keep fueling daily swings until investors have the clarity they’re seeking, analysts said.
“It seems like now in the markets, what doesn’t kill you makes you more paranoid,” said Matt Lloyd, chief investment strategist at Advisors Asset Management. “You’re thinking, ‘the next one is going to be a doozy.’”
Here’s what else to know about the trading:
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Data released on Friday added to Wall Street’s angst about inflation and consumer sentiment. The Personal Consumption Expenditures price index, after stripping out volatile food and energy items, climbed 2.8 percent in February from a year earlier, faster than January’s annual pace. The data indicated that underlying price pressures intensified even before the latest escalation in Mr. Trump’s trade war.
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Investors also assessed the latest sign that consumers are increasingly anxious about the economic outlook. Consumer sentiment plummeted 12 percent in March as expectations about inflation a year from now rose to 5 percent, the highest level since November 2022, according to data published by the University of Michigan. Earlier this week, the Conference Board reported that consumer confidence tumbled this month to its lowest level since January 2021.
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Uncertainty about the rollout of Mr. Trump’s tariffs, and their potential inflationary effects, continued to loom large, capping off a week of tariff-induced swings. Mr. Trump announced plans on Wednesday to impose a 25 percent tariff on imported cars and some parts beginning next week. News of the impending announcement of the auto tariffs pulled down major U.S. stock indexes on Wednesday, though reaction in the broader market was relatively muted on Thursday. Analysts said investors are hoping for clarity next week, when Mr. Trump’s reciprocal tariffs, which are intended to match the tariffs imposed on U.S. goods by other countries, are set to take effect.
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The stocks of major Detroit carmakers, which build some of their vehicles in Canada and Mexico, extended their losses on Friday. Shares in General Motors fell more than 1 percent for the day, while Ford’s stock dropped nearly 2 percent and shares in Stellantis ended the day 4 percent lower.
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The tech-heavy Nasdaq Composite fell 2.7 percent on Friday, pulled down by a drop in shares of several tech giants. Alphabet’s stock fell almost 5 percent and Amazon tumbled more than 4 percent. Investors were closely monitoring CoreWeave’s initial public offering; the cloud computing company made its Nasdaq debut on Friday, becoming the first major artificial intelligence company to go public. The company’s shares opened their first day of trading at $39, down slightly from already scaled back initial public offering price of $40, signaling concern among Wall Street investors about the economy and CoreWeave’s business model.