US stocks traded lower on Friday, with the S&P 500 dropping 0.4%, the Nasdaq falling 0.6%, and the Dow Jones losing 125 points, as investors continued to assess the potential impact of new tariffs while also digesting the latest Personal Consumption Expenditures (PCE) report.
US stocks fall on Friday
Core PCE prices rose by 0.4% month-over-month, surpassing expectations, which pushed the annual inflation rate up to 2.8%, signaling growing price pressures across the economy. Additionally, personal spending increased at a slower pace than anticipated, adding to concerns about the sustainability of consumer demand.
Adding to the market’s cautious mood, fresh reciprocal tariffs between the US and its trading partners are set to take effect next week, raising further uncertainty about the global trade environment and its potential impact on business and economic growth. The consumer discretionary sector was the worst performer on the day, reflecting the broader concerns about rising costs and slowing consumer spending. In contrast, the utilities sector outperformed, benefiting from its defensive characteristics amid the broader market pullback.
Performance of tech giants is mixed
Within the tech sector, the performance of megacap stocks was mixed. Shares of Apple (-0.5%), Microsoft (-0.4%), Amazon (-1.1%), Meta (-0.4%), and Alphabet (-0.6%) all traded in the red, weighed down by the broader market weakness. However, Tesla’s shares were little changed, while Nvidia saw a notable gain, rising by more than 1%, as investor sentiment remained positive toward the semiconductor giant’s prospects.
Despite Friday's pullback, the three major averages are on track to post small gains for the week, marking a second consecutive winning week. The Dow is up 0.8% so far, the S&P 500 has added 0.5%, and the Nasdaq has edged up by 0.1%. This indicates that, even with some volatility in the markets, the broader trend for the week has been positive, reflecting resilience in investor sentiment amid ongoing economic concerns.
