The major indices on Wall Street fell sharply on Friday, following data that showed a rebound in underlying price pressures that exceeded expectations, raising concerns about a tariff strategy from the Trump administration that could further fan the flames of inflation. A report from the Department of Commerce showed that the personal consumption expenditures (PCE) index rose in February in line with what economists surveyed by Reuters expected. However, excluding volatile items such as food and energy, it grew more than expected, while consumer spending rebounded after falling in January.
Equities have suffered sharp declines in the past month, fueled by fears that U.S. President Donald Trump's policies could lead the economy into an era of high inflation and slow growth, which could impact the Federal Reserve's monetary policy path.
This data lends more credibility to the marginal shift we are seeing towards a more stagflationary environment,” said Jordan Rizzuto of GammaRoad Capital Partners. “If inflation rebounds or accelerates before we see the impact of tariffs, it is quite concerning.”
Inflation and concerns about tariffs caused the shares of the most valuable companies on Wall Street to drop sharply, with Apple, Microsoft, and Amazon losing ground.
