Highlights

The major indexes on Wall Street experienced a significant drop due to new data heightening inflation concerns. Consumer spending rebounded less than predicted, while a key inflation metric saw its biggest rise in over a year. Inflation expectations soared, fueled by recent tariff announcements. This led to a broad sell-off, especially impacting technology heavyweights like Amazon and Microsoft.

Sentiment Analysis

• Market sentiment is currently negative, influenced by fears of rising inflation and ongoing tariff concerns.
• Investors are cautious as the new economic data indicates potential prolonged inflationary pressures.
• Technology stocks have been hit hardest, contributing significantly to the overall market decline.
• Uncertainty about future economic conditions is causing both businesses and individuals to adopt a more conservative outlook.

Article Text

Wall Street experienced a notable downturn on Friday, primarily affected by sell-offs in major technology companies such as Amazon, Microsoft, and others. This decline was triggered by new U.S. economic data that heightened fears of weak economic growth and rising inflation, amidst the Trump administration's continuing tariff escalations.

In February, U.S. consumer spending recovery fell short of expectations, while a critical inflation measure registered its highest increase in 13 months. Compounding these concerns, the University of Michigan survey showed a significant rise in consumer inflation expectations, reaching a nearly two-and-a-half-year high for the upcoming 12 months.

The resultant inflation fears were exacerbated by the Trump administration's string of tariff announcements, which are anticipated to elevate the cost of imported goods, potentially inflating overall prices. This dynamic could deter the Federal Reserve from reducing interest rates, leading to a substantial depreciation in stocks of Wall Street's leading companies.

The S&P 500 plummeted by 1.97% to close at 5,580.94, while the Nasdaq dropped 2.70% to 17,322.99. The Dow Jones Industrial Average similarly fell by 1.69%, settling at 41,583.90 points.

Most of the S&P 500 sectoral indexes suffered, notably communication services and consumer discretionary, both registering significant losses. Interest rate futures indicate a 76% likelihood of the Federal Reserve cutting rates by 25 basis points by June, according to CME FedWatch.

Market experts like Greg Bassuk from AXS Investments note that inflation impacts from tariffs are yet to be fully reflected in economic data, predicting potential further inflation increases in the months ahead. Meanwhile, economic uncertainty continues to challenge businesses unprepared for changing policies.

On the Nasdaq, CoreWeave's introduction was underwhelming, debuting below its offering price amidst Nvidia's backing, underscoring the broad-scale market anxiety exacerbated by tariffs. Auto stocks, represented by General Motors and Ford, faced declines driven by continued tariff enforcement by President Trump.

For the week, the major indices saw cumulative losses, and focus now shifts to forthcoming tariff announcements from the Trump administration, rumored to vary from previously stated trade strategies.

Significant declines were registered across various sectors, with Lululemon's shares plummeting following reduced forecasts attributed to tariff unpredictability. Selected mining companies, however, experienced upward momentum amid the trade war's impact on gold prices.

The S&P 500 is positioned for its first quarterly decrease in a year and a half, with technology-focused stocks bracing for the steepest quarterly dip since 2022. Adjustments in market projections include UBS Global Wealth Management's reduction in year-end targets for the S&P 500.

Key Insights Table