On Friday, U.S. stock markets faced a sharp downturn amid rising inflation and concerns about a slowing U.S. economy. This was triggered by the introduction of new trade tariffs and increased inflation.
Sharp U.S. Market Decline
On Friday, the S&P 500 dropped by 2%, erasing approximately $1 trillion in market capitalization. The Dow Jones Industrial Average fell over 700 points, while the Nasdaq Composite suffered a 2.7% drop, marking the most significant decline among major indices.
Impact of Trade Tariffs
President Donald Trump announced a 25% tariff on imported cars and light trucks effective April 3, with additional duties on auto parts starting May 3. This heightened investor concerns over trade tensions and their potential impact on economic growth.
Inflation and Economic Tensions
The Federal Reserve’s core Personal Consumption Expenditures (PCE) index revealed higher-than-expected values, intensifying fears of persistent inflation. This led to increased caution among investors, contributing to the day's market volatility.
As the first quarter of 2025 draws to a close, the S&P 500 is on track for its worst quarterly performance since 2022, reflecting the cumulative impact of ongoing economic uncertainties and policy changes.
