U.S. Stock Market Summary for Friday, March 28, 2025


Major Indices

  • S&P 500: ↓ 1.97% to 5,580.94

  • Dow Jones Industrial Average: ↓ 1.69% to 41,583.90

  • Nasdaq 100: ↓ 2.61% to 19,281.40

  • Russell 2000: ↓ 2.05% to 2,023.27

Market Overview
U.S. equities ended sharply lower on Friday as hotter-than-expected inflation data, weakening consumer sentiment, and escalating trade tensions fueled investor anxiety. The core Personal Consumption Expenditures (PCE) price index — the Federal Reserve’s preferred inflation gauge — rose 0.4% month-over-month and 2.8% year-over-year in February, both exceeding forecasts. Real consumer spending rose just 0.1%, falling short of expectations.

Meanwhile, the University of Michigan’s consumer sentiment index dropped to 57.0 in March, marking its lowest reading in two years, while long-term inflation expectations surged to a 32-year high. These developments intensified concerns around stagflation and economic slowdown.

Adding to the pressure, former President Donald Trump announced plans for new tariffs, including potential levies on pharmaceuticals and a future possibility of auto tariffs. His strong rhetoric on trade policy, particularly toward Canada, underscored growing geopolitical and economic uncertainties.

Sector Highlights

  • Retail: Lululemon Athletica plunged 12% after issuing a weaker earnings outlook. Dollar Tree dropped 5.5% following news it would divest its Family Dollar brand.

  • Technology: Amazon and Microsoft declined 4.3% and 3%, respectively, weighed down by broader tech weakness amid inflation fears.

  • Financials: Goldman Sachs and JPMorgan Chase fell 2.5% and 2.3% respectively, dragged by economic slowdown concerns.

  • Utilities: Typically viewed as a defensive sector, utilities showed relative resilience during the market-wide sell-off.

  • Notable Decliner: Wolfspeed crashed 52% a day after appointing a new CEO, amid ongoing concerns about its financial stability.

Economic Snapshot

  • Core PCE Price Index (Feb): +0.4% MoM, +2.8% YoY (above estimates)

  • Real Consumer Spending: +0.1% (below expectations)

  • University of Michigan Consumer Sentiment (Mar): 57.0, 2-year low

  • Long-term Inflation Expectations: Highest in 32 years
    These figures collectively point to persistent inflationary pressures and fragile consumer confidence, raising the risk of a stagflationary environment.

Expert Commentary

  • Brett Kenwell, eToro: “The worry is that inflation remains elevated even as the economy slows. While stagflation concerns are rising, it may be premature to declare it.”

  • Michael O’Rourke, JonesTrading: “Investors are still digesting the implications of potential auto tariffs.”

  • Jim Baird, Plante Moran Financial Advisors: “It’s difficult to plan with so much uncertainty on the horizon.”

  • Mark Hackett, Nationwide: “A recovery will be hard-fought until policy clarity returns. April historically brings seasonal tailwinds, but this year remains uncertain.”

Government & Political Notes
Trump reaffirmed his intent to impose tariffs on Canada despite diplomatic discussions, and hinted at future tariffs on pharmaceuticals and vehicles. His comments have fueled worries over trade disruptions and further price pressures. According to Bloomberg, economists are revising down U.S. growth forecasts in light of rising trade policy uncertainty.

Conclusion
Friday’s steep losses were driven by a combination of inflationary concerns, deteriorating consumer sentiment, and renewed trade policy threats. With the Fed’s inflation target under pressure and global trade tensions escalating, investors face a challenging environment marked by volatility and uncertainty. Looking ahead, market participants will closely monitor April data and policy developments to gauge the durability of any potential rebound.

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