On Friday, the S&P 500 experienced a significant downturn, dropping 2% amid escalating concerns over inflation and a decelerating U.S. economy. This decline effectively erased approximately $1 trillion in market capitalization.
The Dow Jones Industrial Average also faced a substantial decrease, falling over 700 points, while the Nasdaq Composite suffered the most among major indices, plunging 2.7%.
Contributing factors to this market slump include President Donald Trump’s announcement of a 25% tariff on imported cars and light trucks, effective April 3, with additional duties on auto parts starting May 3. This policy shift has intensified investor apprehension regarding trade tensions and their potential impact on economic growth.
The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, revealed higher-than-anticipated values, further fueling fears of persistent inflation. This development has 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.
