Tariff fears, inflation, and weak forecasts weigh on outlook despite weekly gains in major indexes
On Friday, US stocks ended a four-week slide as the S&P 500 rose 0.1 percent to 5,667.56, finishing the week with a 0.5 percent gain.
The Dow Jones Industrial Average added 32.03 points to close at 41,985.35, and the Nasdaq composite climbed 0.5 percent to 17,784.05.
Despite the weekly rebound, the S&P 500 remains down 4.8 percent this month, according to BNN Bloomberg.
Technology stocks recovered from early losses and helped offset broader market declines. Apple gained about 2 percent and Microsoft advanced 1.1 percent.
Nvidia dropped 0.7 percent, while Micron Technology posted the steepest decline among S&P 500 components, falling 8 percent.
Although the sector has led losses recently, it had been a key driver of gains throughout the previous year.
Uncertainty surrounding the US economy has weighed on markets in recent weeks. Persistent inflation above the Federal Reserve’s 2 percent target and threats of further tariffs have raised concerns among investors and businesses.
US President Donald Trump set an April 2 deadline to impose more tariffs, following earlier deadlines that were often delayed.
“Investors are confused, but there’s a lot less panic infusing the market,” said Mark Hackett, chief market strategist at Nationwide.
Several companies reported weaker outlooks tied to geopolitical tensions and consumer caution. Nike’s stock dropped 5.5 percent after it forecast a sharp revenue decline for the current quarter.
The company pointed to “geopolitical dynamics, new tariffs by the Trump administration and a less confident consumer.”
FedEx also lowered its profit guidance, projecting flat to slightly down revenue year-over-year. The stock fell 6.4 percent.
Homebuilder Lennar slid 4 percent after issuing lower-than-expected forecasts for new orders and average sales prices. The company cited high interest rates, inflation, and declining consumer confidence as factors hurting the housing market.
Interest rates remain a central issue for the housing sector. The Federal Reserve left its benchmark rate unchanged at its most recent meeting as it considers the economic impact of tariffs and other policy changes.
Although the Fed had reduced rates through the end of 2024 amid easing inflation, it has maintained a steady approach in 2025. While lower rates can help support economic growth, they can also risk reigniting inflation.
Fed Chair Jerome Powell acknowledged the economy’s overall strength but warned that uncertainty complicates forecasting.
“With Fed Chair Powell acknowledging that the effect of tariffs on consumer confidence, economic growth and inflation remain unknown, we might be in this below-water holding pattern until after April 2,” said Sam Stovall, chief investment strategist at CFRA.
Recent data showed mixed signals. Reports on home sales, industrial production and unemployment suggested the economy remained solid.
However, consumer sentiment and retail sales revealed growing caution. “We’re in really pessimistic territory,” said Hackett. “When everybody is pessimistic, that’s when a tiny bit of optimism can move markets pretty strongly.”
The bond market showed little change. The yield on the 10-year Treasury note inched up to 4.25 percent from 4.23 percent the day before.
Airline stocks faced mixed results. A fire disrupted operations at London’s Heathrow Airport by knocking out power, forcing the airport to shut down and stranding hundreds of thousands of travellers.
Ryanair Holdings fell 1.5 percent. Among US carriers, American Airlines gained 1.2 percent, United Airlines rose 1.1 percent, and Delta Air Lines lost 0.4 percent.
Boeing’s stock jumped 3.1 percent after Trump announced the company would build the Air Force’s future fighter jet.
Boeing has been under scrutiny in recent years over safety concerns. Its defence-sector competitor, Lockheed Martin, declined 5.8 percent.
In Europe, markets closed lower. The FTSE 100 dropped 0.6 percent after the Bank of England held interest rates steady.
Germany’s DAX fell 0.5 percent following lawmakers’ approval of a budget that includes increased spending on defence and infrastructure.
