US Stocks Tumble Amid Trade Worries and Inflation Concerns

US stocks took a nosedive on Friday as investors on Wall Street grappled with the intensifying trade conflict instigated by President Trump, alongside mounting inflation pressures. The market mood was further dampened by a significant drop in consumer sentiment.

The Dow Jones Industrial Average shed 1.6%, translating to over 700 points in losses, while the key S&P 500 index fell by 2%. Tech-heavy Nasdaq Composite experienced a steeper decline of 2.7% as technology stocks bore the brunt of the sell-off.

This decline was triggered by the release of an unexpectedly high reading of the Personal Consumption Expenditures index. This index, favored by the Federal Reserve as a primary measure of inflation, revealed a higher-than-expected price escalation last month, climbing 0.4% compared to the previous month and marking a 2.8% year-over-year increase. These figures underscore persistent inflation challenges on the road to the Fed’s desired 2% mark.

Adding to the market’s woes, consumer sentiment in the US hit its lowest point since November 2022. The University of Michigan’s latest survey reported a drop to 57, down from February’s reading of 64.7, as Americans grew increasingly anxious about inflation and the broader economic health, particularly regarding the job market.

Stocks sank even further in afternoon trading after President Trump announced that he had conversed with Canadian Prime Minister Mark Carney for the first time since taking office, but gave no indication of retracting tariffs against Canada.

The financial markets had already been on a wild ride this week, starting with optimism that Trump might soften his tariff plans. However, volatility ensued midweek with the announcement of new tariffs on auto imports, keeping investors on edge.