Agencies
New York
Wall Street stocks ended sharply lower on Friday, with selloffs in Amazon, Microsoft and other technology heavyweights, after US data stoked fears of weak economic growth and high inflation as the Trump administration ratchets up tariffs.
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 they expect inflation to remain elevated beyond the next year.
That data fueled fears that a rush of tariff announcements from US. President Donald 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 falling 2.7 percent, Microsoft losing 3 percent and Amazon off 4.3 percent.
“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.
The S&P 500 declined 1.97 percent to end at 5,580.94 points. The Nasdaq fell 2.7 percent to 17,322.99 points, while the Dow Jones Industrial Average dropped 1.69 percent to 41,583.90 points.
Ten of the 11 S&P 500 sector indexes declined, led lower by communication services , down 3.81 percent, followed by a 3.27 percent loss in consumer discretionary.
Interest rate futures suggest traders see a 76 percent likelihood that the Fed will cut interest rates by 25 basis points by its June meeting, according to CME FedWatch.
With Friday’s losses, the S&P 500 is down about 9% from its record high close on February 19. The Nasdaq is down around 14 percent from its record high close on December 16.
“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.’”
