Wall Street stocks ended sharply lower on Friday, with selloffs in Amazon, Microsoft and other technology heavyweights, after data stoked fears of weak economic growth and high inflation as the Trump administration ratchets up tariffs.
The Dow Jones Industrial Average slumped 715.80 points, or 1.7%, to 41,583.90. The S&P 500 lost 2%, and the Nasdaq slid 481 points, or 2.7%. All three indexes finished with weekly losses.
With Friday’s losses, the S&P 500 is down about 9% from its record high close on Feb.19. The Nasdaq is down 14% from its record high close on Dec. 16.
US consumer spending rebounded less than expected in February while a measure of underlying prices increased the most in 13 months.
Adding to concerns, a University of Michigan survey showed consumers’ 12-month inflation expectations soared to the highest in nearly 2-1/2 years in March, and that consumers expect inflation to remain elevated beyond the next year.
That data fueled fears that a rush of tariff announcements from President Trump since taking office in January will boost prices of imported goods, drive inflation and deter the Federal Reserve from cutting interest rates.
Inflation and tariff worries sent shares of Wall Street’s most valuable companies sharply lower, with Apple losing 2.7%, Microsoft down 3% and Amazon falling over 4%.
“One of the other big cautionary points for investors is that the inflation impact of tariffs has yet to show up in the data, which is why we believe this is the calm before the tariff storm, with inflation likely to head more north than south in the coming months,” said Greg Bassuk, CEO at AXS Investments in New York.
Interest rate futures suggest traders see a 76% likelihood that the Fed will cut interest rates by 25 basis points by its June meeting, according to CME FedWatch.
“The problem is we don’t know the rules and businesses really struggle with that,” said Bob Doll, chief executive officer of Crossmark Investments.
“Part of the economic weakness we’re experiencing and likely to see more of is a function of individuals and businesses saying, ‘I’m not quite sure what tomorrow’s going to bring, so I’ll just be a little more cautious.’”
A report noted that policymaker Mary Daly still views two interest-rate cuts this year as a “reasonable” expectation.
Trump’s steadfast commitment to a 25% tariff on auto imports, set to take effect next week, weighed on auto stocks for a second day, with General Motors down 1.1% and Ford falling 1.8%.
Attention now turns to a fresh round of tariffs the Trump administration is set to unveil on April 2, with Trump recently hinting that these measures might diverge from the straightforward tit-for-tat duties previously pledged.
Lululemon Athletica lowered its annual forecasts, citing unpredictability surrounding tariffs. Shares of the sportswear maker plunged 14%.
CoreWeave’s shares opened nearly 3% below their offer price in the Nvidia-backed artificial intelligence infrastructure firm’s Nasdaq debut on Friday. That weak debut could crush hopes of a meaningful recovery in stock market listings, especially as equity markets grapple with tariff-related turmoil.
Mining companies Harmony Gold and Gold Fields jumped 9.5% and 4.5%, respectively, on higher gold prices related to trade war concerns.
The S&P 500 faces its first quarterly decline in six quarters, while the tech-centric Nasdaq is set for its deepest quarterly drop in nearly two years.
UBS Global Wealth Management lowered its year-end target for the S&P 500 to 6,400 from 6,600.
Wolfspeed’s slumped 52%, hitting its lowest since 1998, a day after the chipmaker appointed a new CEO amid its struggles to improve its financial position.
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