The US stock market closed sharply lower on Friday, as concerns over rising inflation and trade policy uncertainty rattled investors. The S&P 500 fell 2%, the Dow Jones Industrial Average plunged 715 points, and the Nasdaq 100 tumbled 2.7%, marking another difficult trading session for Wall Street. Tech stocks led the sell-off, with major companies like Alphabet, Amazon, and Meta losing over 4% each, while Microsoft declined 3%.

Inflation Concerns Intensify

Investor fears over inflation worsened after the University of Michigan’s final consumer sentiment reading for March revealed the highest long-term inflation expectations since 1993. This further dented market confidence, as high inflation reduces consumer purchasing power and puts pressure on the Federal Reserve to maintain restrictive monetary policies.

Additionally, the core PCE price index, which is the Federal Reserve’s preferred inflation measure, rose 2.8% in February, exceeding analyst expectations. The increase in consumer spending by 0.4% further fueled fears that inflationary pressures remain strong, despite recent Federal Reserve efforts to stabilize prices.

Tech Stocks Take a Major Hit

Technology companies, which have been key drivers of market performance, were among the hardest hit. Investors rushed to offload tech shares, as fears of prolonged high interest rates and inflationary pressures dampened growth prospects for the sector.

• Alphabet (Google’s parent company) dropped more than 4%, amid broader concerns about digital advertising slowdowns.

• Amazon shares plummeted over 4%, reflecting worries about consumer spending resilience.

• Meta (formerly Facebook) lost 4%, as investors assessed the potential impact of an economic slowdown on social media ad revenue.

• Microsoft tumbled 3%, as concerns over enterprise technology spending added to the bearish sentiment.

Trade Disruptions Add to Market Anxiety

Adding to economic uncertainty, investors braced for potential trade disruptions as Trump’s 25% auto tariff is set to take effect next week. This move has sparked concerns of retaliatory measures from key trading partners, which could further escalate trade tensions and disrupt global supply chains.

The possibility of higher tariffs on imported goods could impact automakers, manufacturers, and global trade flows, leading to more market volatility in the coming weeks.

Weekly Market Performance

Friday’s sell-off capped another turbulent week for the stock market, with all major indices recording losses:

• The S&P 500 posted a weekly decline of over 1%, marking its fifth loss in six weeks.

• The Nasdaq dropped over 2%, reflecting weakness in the tech sector.

• The Dow Jones slipped 0.8%, weighed down by industrial and consumer stocks.

Investor Outlook Moving Forward

The market remains on edge, as traders weigh inflation data, Federal Reserve policy, and trade developments. The coming weeks will be critical for Wall Street, as investors look for signs of stability in economic indicators and corporate earnings reports.

For now, market volatility is expected to persist, with analysts closely watching Federal Reserve policy moves, global trade negotiations, and corporate earnings updates to gauge the future trajectory of US stocks.

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