The Dow fell more than 700 points on Friday, as rising inflation and tariff uncertainty weighed on investor sentiment.
A report on Friday from the US Labour Department showed that the Federal Reserve's preferred inflation measure – the core personal consumption expenditures (PCE) price index – rose more than expected in February. Core PCE prices, which strip out food and energy, rose 2.8 per cent annually compared to the 2.7 per cent forecast.
Headline PCE inflation rose 2.5 per cent year-on-year, in line with forecasts but unchanged from January.
The Dow Jones Industrial Average closed 715.08 points - or 1.68 per cent - lower to 41,583.90. The S&P 500 and Nasdaq Composite dropped 1.97 and 2.70 per cent, respectively, at the closing bell. The small-cap Russell 2K fell 2.20 per cent. Meanwhile the price of gold was up 0.82 per cent to $3,086.00 per ounce.
Friday's data showed that inflation in the US heated up before most of President Donald Trump's tariffs had gone into effect. It also comes before the April 2 date he has set for a series of levies against America's trading partners.
Canada and the European Union have said they are preparing retaliatory tariffs against the US.
Most economists say that the Trump tariffs could lead to an inflation resurgence, while others warn that his hardline stance on deporting migrants could upend the labour market.
Officials at the Federal Reserve, who last week voted to keep interest rates unchanged for a second meeting in a row, are debating whether Mr Trump's tariffs pose a one-time inflationary bump or not.
“We face the same fog as businesses and consumers,” Richmond Fed president Tom Barkin said on Thursday. “How does one drive in fog? Carefully and slowly, and if there’s a safe place to pull over, you do so to avoid getting in trouble. That’s where we are.”
A separate report on Friday showed that US consumer inflation expectations rose to a 32-year high over tariff anxiety. Consumers surveyed by the University of Michigan expect prices to rise by a yearly rate of 4.1 per cent over the next five to 10 years.
The latest survey by the university also showed consumer sentiment declined from 64.7 to 57, its lowest level in more than two years.
Fed Chairman Jerome Powell last week dismissed the Michigan survey as an outlier on long-run inflation expectations.
Business Insights
- Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
- The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
- US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
Company%20profile
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Tips%20for%20travelling%20while%20needing%20dialysis
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House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
THE BIO:
Favourite holiday destination: Thailand. I go every year and I’m obsessed with the fitness camps there.
Favourite book: Born to Run by Christopher McDougall. It’s an amazing story about barefoot running.
Favourite film: A League of their Own. I used to love watching it in my granny’s house when I was seven.
Personal motto: Believe it and you can achieve it.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
Company%20Profile
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
