The New York Stock Exchange is facing a decline due to persistent inflation, with major indices like the Dow, Nasdaq, and S&P 500 all reporting losses. Economic indicators show challenges ahead, including unchanged inflation rates and a slight rise in core inflation. Consumer spending growth remains weak, while U.S. Treasury yields have dropped. Investors are closely watching upcoming tariff announcements and corporate earnings, with notable movements in companies like Lululemon and US Steel.
New York Stock Exchange Faces Decline Amid High Inflation
The New York Stock Exchange is experiencing a downturn on Friday, impacted by persistently elevated inflation levels in the United States for February. Investors are particularly anxious as April 2 approaches, a significant date marking the implementation of new tariffs.
As of 10:05 GMT, the Dow Jones Industrial Average saw a decrease of 0.65%, the Nasdaq Composite fell by 0.76%, and the S&P 500 index dropped by 0.57%.
Economic Indicators Suggest Challenges Ahead
Patrick O’Hare from Briefing.com commented, “The macroeconomic data released this morning revealed a tough reality: we cannot anticipate the Federal Reserve (Fed) lowering rates in the near future.” The official PCE index revealed that inflation remained unchanged at +2.5% year-on-year for February, aligning with analysts’ forecasts.
Core inflation, which excludes fluctuating food and energy prices, experienced a slight uptick to +2.8%, up from +2.7% in January, according to data released by the Commerce Department. While analysts had anticipated figures within this range, the core inflation’s increase was unexpected.
Furthermore, adjusted for inflation, consumer spending grew by just 0.1 points, a modest figure considering that consumption had dropped in January due to fires in Los Angeles and a significant snowstorm affecting the Deep South, highlighted Christopher Low from FHN Financial in an AFP report. “Suddenly, the economy appears extraordinarily weak in the first quarter,” he added.
In the bond market, U.S. Treasury yields fell notably following the inflation report. By 14:00 GMT, the ten-year yield dropped to 4.30%, down from 4.36% at the previous close, while the two-year yield decreased to around 3.96%, compared to 3.99% on Thursday.
Additionally, a consumer confidence survey from the University of Michigan revealed a sharp year-on-year decline of 28%. Survey director Joanne Hsu noted, “Consumers continue to express concerns regarding the current economic policies and developments.”
Investors are also keenly observing April 2, referred to by President Trump as “liberation day,” when he is expected to announce his plans for “reciprocal tariffs” that could impact all imported goods within the U.S. This announcement will add to existing tariffs, including those on steel, aluminum, and foreign-manufactured automobiles.
On the corporate front, sportswear retailer Lululemon faced a significant drop of 14.11% after revealing forecasts that fell short of analysts’ expectations for both revenue and net profit in the first quarter of the fiscal year. Conversely, US Steel saw a positive uptick of 3.13%, spurred by reports of a potential $7 billion investment from Japanese competitor Nippon Steel should a merger occur between the companies. This figure far exceeds the previous $2.7 billion commitment from Nippon Steel before its acquisition bid for US Steel was blocked by Washington.
Investors are also looking forward to new pricing details from CoreWeave, a startup set to go public today with a valuation approaching $19 billion. The cloud computing company has adjusted its ambitions, setting the initial stock price at $40, down from an earlier range of $47 to $55, and has reduced the share offering to 37.5 million from the originally planned 49 million.