Wall Street closed out the week sharply lower, with markets rattled by renewed concerns over inflation and a looming wave of reciprocal US tariffs. The Dow Jones Industrial Average shed 716 points, or 1.69%, to finish at 41,584. The S&P 500 dropped 1.97%, while the tech-heavy Nasdaq fell 2.7%, led down by heavy losses in Alphabet, Meta and Amazon.
For the week, the Nasdaq declined 2.59% and is now on track for its worst monthly performance since December 2022, while the S&P 500 and Dow notched their fifth losing week out of the last six.
Inflation data rattles sentiment
Friday’s hotter-than-expected inflation print added to investor anxiety. Core personal consumption expenditures (PCE) rose 2.8% year-on-year in February, with a 0.4% increase month-on-month – both readings coming in above expectations. Meanwhile, long-term inflation expectations hit their highest levels since 1993, according to a University of Michigan survey.
The data follows weaker-than-forecast consumer spending figures. Adding to the uncertainty is President Trump’s announcement of a 25% tariff on foreign-made cars.
Markets brace for reciprocal tariffs
President Donald Trump’s “reciprocal tariff” strategy has elicited warnings from economists and threats of retaliation from key trading partners, including Canada and the European Union. With the impending “Liberation Day” on April 2, when these tariffs are set to be implemented, market direction in the coming week will heavily depend on the scope and scale of the White House’s next moves.
Australian shares tipped to fall
The ASX is set to open sharply lower, with futures pointing to a 91 point drop at the open. That follows the risk-off tone from global markets, driven by uncertainty over tariffs.
Gold hit a fresh high on Monday, trading above $3085 an ounce, as investors sought safer ground.
One Australian dollar is buying 62.88 US cents.
