Market Mayhem: How Major U.S. Stock Indexes Fared on Friday, March 28, 2025

Friday, March 28, 2025, was a rollercoaster ride for major U.S. stock indexes, as investors grappled with a barrage of economic data, geopolitical tensions, and inflation concerns. The day's performance was a stark reminder of the market's volatility and the myriad factors that can influence investor sentiment.

The S&P 500, often seen as the bellwether of the U.S. stock market, ended the day down 0.3%, closing at 5,693.31. The Dow Jones Industrial Average fared worse, shedding 0.4% to close at 42,299.70. The tech-heavy Nasdaq composite dropped 0.5%, finishing at 17,804.03. Even the Russell 2000, which tracks smaller companies, fell 0.4% to 2,065.70. These declines came despite a week that saw the S&P 500 up 0.5%, the Dow up 0.7%, the Nasdaq up 0.1%, and the Russell 2000 up 0.4%.



So, what drove this market mayhem? Let's break it down.

Inflation Concerns

The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation measure, rose 2.5% in February 2025 over the past 12 months, in line with economists' forecasts. However, the core PCE, which excludes volatile food and energy sectors, rose 2.8%, exceeding expectations of 2.7%. This higher-than-expected core rate raised concerns that inflation would remain elevated, keeping the Federal Reserve from lowering interest rates. As a result, the Dow Jones Industrial Average ended down 1.69%, or 716.11 points, to 41,583.59; the S&P 500 index shed 1.97%, or 112.37 points, to 5,580.93; and the tech-heavy Nasdaq dropped 2.7%, or 481.04 points, to 17,322.99. This data release led to increased market volatility as investors worried about the potential for persistent inflation and its impact on future economic growth and corporate earnings.

Tariff Escalations

President Donald Trump's announcement of 25% tariffs on imported cars created winners and losers among auto stocks. General Motors sank sharply, while foreign automakers also fell. However, companies like Rivian and Tesla held up better, as did those that could benefit from U.S. drivers opting against buying new cars. The uncertainty surrounding tariffs and their potential impact on the economy and corporate profits contributed to market volatility. For example, the S&P 500 fell 18.89 points, or 0.3%, to 5,693.31, while the Dow Jones Industrial Average dipped 155.09 points, or 0.4%, to 42,299.70. The Nasdaq composite fell 94.98 points, or 0.5%, to 17,804.03, and the Russell 2000 index of smaller companies fell 8.14 points, or 0.4%, to 2,065.70.

Economic Data Releases

The University of Michigan’s final read on consumer sentiment for March 2025 showed the highest long-term inflation expectations since 1993. This data release indicated that consumers were becoming more pessimistic about the economy's future, which could lead to reduced spending and slower economic growth. Economists fear that gloomy and fearful consumers will shut their pocketbooks and slow the economy, which makes up about 70% of the GDP. This data release contributed to market volatility as investors worried about the potential impact on corporate earnings and economic growth.

Geopolitical Events

Canadian Prime Minister Mark Carney warned President Donald Trump that Canada was ready to implement retaliatory tariffs. However, the European Union was considering concessions to reduce the reciprocal tariffs from the U.S. that are set to increase after April 2, 2025. This geopolitical uncertainty contributed to market volatility as investors worried about the potential for trade wars and their impact on the global economy.



In summary, the key factors driving the performance of major U.S. stock indexes on Friday, March 28, 2025, were inflation concerns, tariff escalations, economic data releases, and geopolitical events. These factors significantly impacted investor sentiment and market volatility, leading to a decline in major U.S. stock indexes. As we move forward, investors will need to keep a close eye on these factors and be prepared for continued volatility in the market.