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The financial markets experienced a sharp sell-off last Friday as concerns over inflation and trade tensions sent stocks tumbling. Wall Street struggled with renewed inflation pressures, while uncertainty surrounding tariffs contributed to heightened volatility.
Stock Market Sell-Off: Key Drivers
The Dow Jones Industrial Average fell 1.6%, shedding over 700 points. The S&P 500 dropped 2%, and the Nasdaq led the declines with a 2.7% loss. Tech stocks were among the hardest hit, with major players like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) suffering hefty declines.
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The sell off was triggered in part by a hotter-than-expected personal consumption expenditures index report, which showed core inflation rising 0.4% month-over-month and 2.8% year-over-year. This stubborn inflationary trend remains a concern for the Federal Reserve, which has targeted a 2% inflation goal.
Further exacerbating market volatility, U.S. consumer sentiment for March dropped to 57, its lowest reading since November 2022, according to the University of Michigan. Investors also reacted negatively to escalating trade tensions, with President
Donald Trump reaffirming his commitment to tariffs, particularly targeting foreign auto imports. The Federal Reserve Bank of Atlanta's GDPNow index forecasted a 2.8% decline in U.S. GDP for Q1, raising concerns about slowing economic growth.
The market rout was widespread, with the S&P 500 falling 1.87% to 5,587.11 points, the Nasdaq dropping 2.51% to 17,357.64 points, and the Dow slipping 1.62% to 41,612.69 points. Interest rate futures suggest a 76% likelihood that the Fed will cut interest rates by 25 basis points by June, according to CME FedWatch Tool.
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Bitcoin and Crypto Market Performance
Amid Wall Street's downturn, Bitcoin also faced downward pressure, dropping 3.91% as of writing. The broader altcoin market, including Ethereum, saw an even sharper decline of 4.75%. While the stock market’s decline was largely attributed to inflation concerns and trade-related uncertainties, the crypto market's drop reflects broader risk-off sentiment among investors.