Stocks sold off Friday after new federal data showed prices rising faster than expected, reigniting inflation fears on Wall Street.
The Dow Jones Industrial Average was down more than 630 points shortly after 12:30 p.m. EDT, a loss of 1.5 percent. The Nasdaq composite was down 2.4 percen
t and the S&P 500 index was down 1.8 percent.
The stock slide began shortly after the Commerce Department released data showing an unexpectedly steep increase in consumer prices.
The personal consumption expenditures (PCE) price index rose 2.5 percent over the past year, but 2.8 percent without food and energy prices included. On a monthly basis, the PCE index advanced by 0.3 percent while core PCE increased by 0.4 percent.
Stocks have fallen steadily over the past two months as Wall Street braces for the economic impact of President Trump's trade agenda. Economists expect Trump's new aggressive import taxes to boost the prices of key U.S. goods and slow the economy, which is already weakening after years of steady growth.
Trump has announced plans to impose tariffs on an untold number of countries by April 2, along with 25 percent tariffs on all foreign autos and auto parts. The president had previously ordered taxes of 25 percent on all Canadian and Mexican goods before temporarily loosening those tariffs after talks with each nation.
Trump has argued his new tariffs will bring manufacturing jobs back to the U.S. and lead to an influx of foreign revenue, insisting that any short-term pain will be worth the long-term benefit.
“We’re the piggy bank that everybody steals from, and they’ve been doing it for many years, for decades, and we’re not going to let it happen," he said this week.
But consumers and businesses have shown increasing concern about the impact of Trump's tariffs and a lack of faith in his ability to deliver on his promises.
Inflation expectations among consumers for the year ahead rose to 5 percent, up from 4.3 percent last month, according to the University of Michigan survey of consumer sentiment. This marked the highest reading since 2022 as well as three months of expectation increases that Michigan pollsters described as “unusually large.” ...read more read less
