Stocks had a challenging week, as early gains faded amid investor concerns over inflation and escalating trade tensions. The S&P 500 fell 1.53%, marking its fifth weekly decline in six weeks. Technology stocks were hit particularly hard, dropping 2.1%, while consumer discretionary, consumer staples, and energy sectors managed slight gains.
Investor sentiment was tested as core consumer prices rose more than anticipated, fueling inflation worries, and consumer spending showed signs of slowing. Tariff concerns heightened mid-week when new tariffs on foreign-made autos were announced, raising fears of broader trade disruptions.
On the economic front, the final GDP figures showed growth at 2.4% for the fourth quarter of 2024, down slightly from the previous quarter. Personal income rose 0.8% in February, and consumer spending increased by 0.4%. Meanwhile, inflation pressures persisted, with the PCE price index climbing 0.3% for February and 2.5% over the past year.
This week’s employment report will offer fresh insights into the job market. February saw modest job growth of 151,000 and an unemployment rate of 4.1%.
For a more detailed analysis of last week’s markets and economic trends, check out the latest issue of Market Week.
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David Bennett