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US indices suffered steep declines with the US500 falling 1.9%, US100 dropping 2.5%, and US30 sliding 1.6%, as investors reacted to consumer sentiment and inflation data. The S&P 500 is on track for its worst quarterly performance since 2022.
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Consumer sentiment plummeted to its lowest level since November 2022 according to University of Michigan data, with Americans expressing increased concerns about inflation and economic uncertainty ahead of the upcoming tariff implementations.
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Signs of stagflation emerged as data showed tepid consumer spending alongside stubborn inflation, prompting economist David Alcaly at Lazard Asset Management to note this "general pattern" could intensify "as new tariffs and other policy changes begin to bite."
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The tech sector led market declines with the Magnificent 7 index tumbling 3.2%. Amazon and Alphabet each dropped over 4%, while other megacaps broadly retreated amid concerns about the sustainability of AI investments.
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Treasury yields declined significantly with the 10-year yield falling 10 basis points to 4.26%, as investors sought safety in bonds. Meanwhile, gold continued its remarkable run, rising 0.9% to $3,083.77 an ounce.
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CoreWeave made its Nasdaq debut under ticker CRWV but fell as much as 5.8% after raising only $1.5 billion in its IPO, well below the $4 billion initially targeted. The Nvidia-backed AI cloud provider faces $7.5 billion in debt repayments by the end of next year.
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Lululemon shares plunged 15% after CEO Calvin McDonald warned that "consumers are spending less due to increased concerns about inflation and the economy," echoing similar concerns from other retailers about deteriorating consumer sentiment.
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Economists downgraded their 2025 US growth forecasts to 2%, citing "softer consumer spending and more limited capital investment amid mounting uncertainty created by the ever-evolving trade policy," according to the latest Bloomberg survey.
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US stock funds experienced their largest weekly outflow this year according to Bank of America, citing EPFR Global data, while European equities continued to attract inflows despite broader market uncertainty.
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Reddit shares dropped more than 5%, continuing their decline as short interest increased and analysts questioned the company's growth prospects. The social media platform's stock has fallen 50% from its February high.
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Oil prices declined with WTI crude falling 0.8% to $69.33 per barrel amid concerns that Trump's expanding tariff policies will reduce energy demand, though crude remains on pace for its third straight weekly advance.
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Cryptocurrencies joined the broader market selloff with Bitcoin falling 4.1% to $83,745 and Ethereum dropping 6.9% to $1,869.72 as risk assets faced pressure across the board.
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The Canadian dollar strengthened after President Trump described a call with Canadian Prime Minister Mark Carney as "extremely productive" amid ongoing trade tensions between the two countries.
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UBS Global Wealth Management lowered its S&P 500 year-end target to 6,400 from 6,600 but maintained that "US stocks can recover and post gains for the year" despite recent economic turbulence.
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US energy firms cut the number of oil and natural gas rigs operating for the first time in three weeks, with Baker Hughes reporting the total rig count fell by one to 592, putting it 29 rigs or 5% below this time last year.
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