On Friday, the New York stock market took a nosedive amid fears of stagflation in the U.S. economy.
February’s U.S. personal consumption expenditures (PCE), PCE price index, and the University of Michigan’s March consumer sentiment index raised inflation concerns while simultaneously stoking fears of slowing growth.
Consumer spending, which accounts for roughly 70% of the U.S. gross domestic product (GDP), is a critical economic indicator.
Consumer confidence has plummeted to its lowest point in three years, signaling more cautious spending.
Meanwhile, the Magnificent Seven big tech stocks suffered significant losses due to stagflation concerns, but Tesla broke its nine-week losing streak.
Panic Selling Grips Market
Investors dumped stocks amid stagflation fears.
High-risk tech stocks bore the brunt of the sell-off.
The tech-heavy Nasdaq plunged 481.04 points (2.70%) to 17,322.99. The index surpassed 20,000 in mid-February and is now about to fall below 17,000.
With U.S. President Donald Trump signing an executive order on auto tariffs on March 26 and plans to announce reciprocal tariffs on April 2, the 17,000 mark will likely be breached.
The Nasdaq hasn’t dipped below 17,000 since August of last year.
The S&P 500, which broadly reflects market conditions, fell 112.37 points (1.97%) to close at 5,580.94.
The Dow Jones Industrial Average, comprising 30 large blue-chip stocks, shed 715.80 points (1.69%) to finish at 41,583.90.
All three major indices retreated again every week.
The Dow fell by 0.96%, the S&P 500 by 1.53%, and the Nasdaq by 2.59%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), Wall Street’s “fear index,” surpassed the psychological resistance level of 20, surging 2.96 points (15.84%) to 21.65.
This VIX surge indicates a sharp increase in short-term market volatility.
M7 Take a Hit
The “Magnificent Seven” tech stocks all suffered substantial losses.
Nvidia had the smallest drop, closing down $1.76 (1.58%) at $109.67.
However, Nvidia’s stock plummeted 6.82% over the week, the largest weekly decline among the group.
Tesla slid $9.58 (3.51%) to $263.55 but broke its eight-week losing streak every week.
Tesla surged nearly 6% over the past week.
Apple fell $5.95 (2.66%) to $217.90, while Microsoft (MS) dropped $11.78 (3.02%) to close at $378.80.
Alphabet plunged $8.02 (4.89%) to $156.06, and Amazon tumbled $8.64 (4.29%) to $192.72.
Meta Platforms also slumped $25.84 (4.29%) to $576.74.
On a weekly basis, Apple showed the best performance, falling by only 0.17%, followed by Amazon, which had a 1.8% drop.
Microsoft fell by 3.2%, Meta by 3.3%, and Alphabet by 6.2%.
Rocket Lab Soars, Detroit Big 3 Stumble
While tech stocks struggled, Rocket Lab, a spacecraft launch company, rose over 1%. The stock closed up $0.20 (1.09%) at $18.62.
The U.S. Space Force selected Rocked Lab as one of its spacecraft launch service providers, boosting stock prices.
Cloud software firm Braze stocks jumped over 2% on better-than-expected quarterly results, finishing up $0.81 (2.21%) at $37.51.
Reports of Trump’s warning automobile companies not to pass on tariff burdens to consumers through price increases sent Detroit’s Big 3 automakers into a tailspin.
Stellantis, a joint venture between the U.S., Italy, and France, took the biggest hit, plunging $0.48 (4.06%) to $11.33.
Ford dipped $0.18 (1.82%) to $9.72, while General Motors (GM) closed down $0.52 (1.10%) at $46.68.
