Dow and S&P 500 tumble amid inflation and tariff woes

The stock market tumbled on Friday as investors grappled with stubborn inflation data and tariff concerns. The Dow closed 716 points lower, a drop of 1.7%. The S&P 500 fell by 1.97%, while the Nasdaq Composite slid 2.7%. All three major indexes ended the week in the red, with the S&P 500 down more than 5% this year. The Commerce Department reported that inflation in February remained high. The Personal Consumption Expenditures (PCE) index rose 2.5% year-over-year, unchanged from January. The core PCE index, which excludes food and energy, ticked up to 2.8% from 2.7% in January. This is above the Federal Reserve’s target of 2%. Consumer sentiment also dropped 12% this month, according to the University of Michigan’s latest survey.

#NewsFatafat | Deep gashes on the Wall Street with all three benchmark indices closing in the red. Hotter-than-expected inflation data and uncertainty over upcoming tariffs send markets in downward spiral#Nasdaq #WallStreet pic.twitter.com/KcZHv6iHkY

— ET NOW (@ETNOWlive) March 29, 2025

Investors offloaded stocks in industries such as technology, autos, and airlines. Shares of Google declined by 4.9%, Stellantis fell 4%, and Delta Air Lines dropped 5%.

Market tumbles amid inflation concerns

#MarketAlert | Europe: European stock markets declined on Friday as global investors assessed the impact of U.S. tariff announcements and fresh economic data#Stoxx #CAC40 #DAX pic.twitter.com/sF8R4qmV5M

— ET NOW (@ETNOWlive) March 29, 2025

President Donald Trump’s announcement of 25% tariffs on all cars shipped into the US has fueled uncertainty. Tariffs on car parts are set to take effect by May 3. Economists expect these tariffs will lead to higher consumer prices and hinder economic growth. Art Hogan, chief market strategist at B. Riley Wealth Management, said, “It’s natural for people to expect higher prices because we haven’t seen a trade war like this since historical instances of tariff implementations.” The yield on the 10-year Treasury note fell to 4.26% as investors turned to safer government bonds. The Cboe Volatility Index (VIX), Wall Street’s “fear gauge,” surged by 16%. Wall Street analysts have revised down their year-end targets for the S&P 500. UBS trimmed its target to 6,400 from 6,600, Barclays to 5,900 from 6,600, and Goldman Sachs to 6,200 from 6,500. Meanwhile, gold futures in New York surged above a record high of $3,100 as investors sought safe havens. Goldman Sachs increased its year-end target for gold prices to $3,300. The current market dynamics highlight the challenges facing investors as they navigate inflationary pressures, tariff uncertainties, and fluctuating consumer sentiment. Image Credits: Photo by Austin Distel on Unsplash