March 29: Wall Street's primary indices fell sharply on Friday, as data underscored underlying price pressures, stoking fears that the Trump administration's tariff manoeuvres could further exacerbate inflationary trends.

A Commerce Department report showed the Personal Consumption Expenditures Price index rose in line with expectations.

However, excluding volatile items such as food and energy, the index rose more than expected on an annual basis in the previous month, while consumer spending rebounded after falling in January.

Adding to the unease, final figures released by the University of Michigan showed consumer sentiment deteriorated further in March.

Equities have experienced significant declines over the past month, driven by concerns that President Donald Trump's wavering policies might steer the economy towards a period of heightened inflation and tepid growth, potentially complicating the Federal Reserve's monetary policy trajectory.

"The problem is we don't know the rules and businesses really struggle with that," said Bob Doll, chief executive officer of Crossmark Investments.

"Part of the economic weakness we're experiencing and likely to see more of is a function of individuals and businesses saying 'I'm not quite sure what tomorrow's going to bring, so I'll just be a little more cautious'."

An index tracking rate-sensitive banks fell over 2%.

Traders continued to expect that the Fed will trim borrowing costs by 25 basis points for the first time this year in July, as reflected in data compiled by LSEG.

A report noted that policymaker Mary Daly still views two interest-rate cuts this year as a "reasonable" expectation.

Trump's steadfast commitment to a 25% tariff on auto imports, set to take effect next week, weighed on auto stocks for a second day, with General Motors and Ford falling over 2% each.

Attention now turns to a fresh round of tariffs the US intends to unveil on April 2, with Trump hinting that these measures might diverge from the straightforward tit-for-tat duties previously pledged.

Simultaneously, a report indicated that the European Union is weighing concessions for Trump following the enactment of reciprocal tariffs.

At 11.32am ET, the Dow Jones Industrial Average fell 503.9 points, or 1.19%, to 41,795.8, the S&P 500 lost 79.13 points, or 1.39%, to 5,614.18 and the Nasdaq Composite lost 349.44 points, or 1.96%, to 17,454.59.

The CBOE volatility index rose 1.63 points to a one-week high.

Lululemon Athletica was the latest to lower its annual forecasts, citing unpredictability surrounding tariffs. Shares of the sportswear maker plunged 14.9%, dragging the consumer discretionary sector down by more than 2.5%.

On the flip side, bullion miners Harmony Gold and Gold Fields jumped 9% and 6.3%, respectively, on higher gold prices, as investors flocked to safe-haven assets. 

The S&P 500 is facing its first quarterly decline in six quarters, while the tech-centric Nasdaq braces for its most significant quarterly drop in nearly two years.

UBS Global Wealth Management was the latest brokerage to lower its year-end target for the benchmark index to 6400 from 6600.

Investors will also scrutinise speeches by Federal Reserve policymakers Michael Barr and Raphael Bostic later in the day.

Wolfspeed's shares slumped about 48%, hitting their lowest since 1998, a day after the chipmaker appointed a new CEO amid its struggles to improve its financial position.

Declining issues outnumbered advancers by a 3.14-to-1 ratio on the NYSE and by a 4.07-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and 10 new lows, while the Nasdaq Composite recorded 28 new highs and 239 new lows.

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