Investors Brace for Tariff Effects as Inflation Data Approaches

NEW YORK, New York — U.S. stock futures dipped slightly on Friday as investors confronted ongoing tariff uncertainty and prepared for the release of crucial inflation data. The Dow Jones Industrial Average fell by 31 points, or 0.07%, while futures for the S&P 500 and the Nasdaq also saw minor declines of 0.1% and 0.2% respectively. This leads into the important February personal consumption expenditures (PCE) price index, expected to be released at 8:30 a.m. ET, which may indicate if inflation remains a persistent concern for investors.

The anticipated PCE price index report is projected to show a 0.3% rise for February, reflecting a 2.5% increase year-over-year. Investors are particularly anxious following recent remarks from the Federal Reserve, which raised its inflation forecast, suggesting that inflation may not be dissipating swiftly.

The drop in stock futures follows a challenging trading session on Thursday, where the major indices closed lower. Specifically, the Dow fell by about 155 points, or 0.4%, with the S&P 500 and the Nasdaq dropping 0.3% and 0.5% respectively. These declines were triggered by the announcement of impending tariffs on foreign vehicles, adding to market volatility. President Donald Trump revealed that tariffs of 25% would be imposed on all cars not manufactured in the United States, effective April 2, stoking fears among investors of a potential slowdown in consumer sentiment.

“I don’t expect market volatility to calm down until there is more certainty in policy,” said Lauren Goodwin, chief market strategist at New York Life Investments, during an interview on CNBC Thursday. “Many in the market are looking for clarity in the coming week, but I anticipate that volatility will be persistent.” As of Thursday’s close, Wall Street appeared to be experiencing a modest 0.8% weekly advance, with the S&P 500 up by 0.5% and the Nasdaq on track for a slight 0.1% gain.

In corporate news, Lululemon shares plunged more than 11% after the athleisure retailer provided guidance for 2025 that fell short of analyst expectations. The company projected first-quarter earnings between $2.53 to $2.58 per share, below the $2.72 anticipated by analysts. Conversely, the stock of Semafor rose nearly 5% after it was reported that Nippon Steel would potentially invest up to $7 billion in the company to gain regulatory approval for a merger.

Another major player, Bausch + Lomb, saw its stock drop over 4% following news of a voluntary recall of its implantable eye lenses due to safety concerns. Wells Fargo downgraded the stock from overweight to equal weight, predicting an uncertain timeline for resolving these issues, which could lead to a significant loss in market share for their key product line.

As markets brace for the sensitive inflation report, analysts will be closely observing the data as they assess potential implications for Fed policy and the broader economy. Fundstrat’s Tom Lee suggested that stocks could experience a significant rebound post-April 2, likening the circumstances to a recovery seen in 2018. He expressed strong confidence in the performance of certain tech stocks, dubbed the “Magnificent Seven” as they emerge from recent pressures.