Wall Street closed out its second straight losing week on Friday, with the S&P 500 falling 0.6% and the Dow Jones Industrial Average dropping 0.5%. The Nasdaq composite also ended 1% lower, as technology and communication services stocks weighed down the market.
Software maker Adobe slumped 13.7% after giving investors a weak revenue forecast, while Microsoft and Broadcom also saw losses. Communication services stocks like Meta Platforms and Google parent Alphabet also contributed to the market decline.
The latest pullback for stocks came as traders reviewed reports showing that inflation, though cooling, remains stubborn. Consumer sentiment unexpectedly fell in March, with consumers slightly less optimistic about the economy but still expecting inflation to decrease further.
Inflation remains a major concern for Wall Street, with hopes for the Federal Reserve to start cutting interest rates. The Fed raised interest rates sharply in 2022 to combat inflation, which reached as high as 9.1% that year.
Reports on consumer and wholesale prices this week showed inflation ticking up, but there were also signs of softening in the economy. The rally for stocks that began in October has stalled in March as investors navigate uncertainty around inflation, the Fed, and the economy.
Fed officials will provide their latest interest rate forecasts on Wednesday, with traders leaning towards a rate cut in June. Bond yields edged higher, and weak financial forecasts from companies like Ulta Beauty and Jabil weighed down the market.
Markets in Europe ended mixed, while markets in Asia slipped. The broader economy remains strong, but signs of a potential slowdown have investors on edge. Fed policy and inflation will continue to be key factors driving market sentiment in the coming weeks.
