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4w ago

U.S. Markets Plunge as Inflation and Auto Tariffs Shake Investor Confidence

The S&P 500 fell 2% on Friday, marking its fifth losing week in six, as new auto tariffs and persistent inflation stoke fears of economic slowdown.

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German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 27, 2025. REUTERS/Staff
People stand in the lobby of the London Stock Exchange in London, Britain, May 14, 2024. REUTERS/Hannah McKay/File Photo
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Overview

  • President Trump’s 25% auto import tariffs, set to take effect next week, have intensified global trade tensions and market volatility.
  • The Federal Reserve’s preferred inflation gauge, the core PCE index, rose 2.8% year-over-year in February, exceeding expectations and limiting the Fed’s ability to cut interest rates further.
  • U.S. consumer sentiment has dropped to its lowest level since 2009, with two-thirds of consumers expecting unemployment to worsen in the coming year, according to a University of Michigan survey.
  • Major U.S. stock indexes suffered steep declines on Friday, with the Dow Jones Industrial Average down 715 points (1.7%) and the Nasdaq falling 2.7%.
  • Tech stocks, including Apple, Microsoft, and Tesla, were among the hardest hit, as investors grapple with inflation concerns and tariff uncertainties.