Wall Street Stocks drop amid Inflation concerns, Trump’s Tariff Plans

Wall Street stocks opened lower on Friday as investors braced for the possibility of new tariffs from former US President Donald Trump next week, while key inflation data showed a higher-than-expected rise.

Ten minutes into trading, the S&P 500 Index fell to 5,684.32, while the Dow Jones Industrial Average declined by 0.2% to 42,233.99. The technology-heavy Nasdaq Composite Index also dropped by 0.4%, settling at 17,741.72.

Christopher Low of FHN Financial attributed the market’s reaction to recent economic data, particularly the personal consumption expenditures (PCE) price index, which rose by 0.4% in February compared to January. This increase, excluding food and energy costs, was higher than analysts had anticipated.

Over the past year, the PCE price index—widely regarded as the Federal Reserve’s preferred inflation measure—rose by 2.8%, slightly above predictions.

Low pointed out that weak consumer spending, influenced by harsh January weather, played a role in the market’s response.

“The importance of consumers in driving the US economy is evident, as these expenditure figures are among the first to reflect Trump’s time in office,” he noted.

He further warned that a dip in consumer confidence could significantly impact economic activity.

Meanwhile, investors are closely monitoring Trump’s proposed reciprocal tariffs, which are set to take effect on April 2. These tariffs are expected to target trade partners and nations with trade deficits with the United States, adding further uncertainty to the market.