Gold Grinds Higher, Wall Street Falls As Tariff-Inflation Combo Hammer End-Of-Week Risk Appetite

Risk appetite is on track to end the week on a negative note. Investors continue to trim their equity exposure amid the threat of tariffs and a higher-than-expected increase in the Fed’s most closely watched inflation metric.

The latest data from the Bureau of Economic Analysis showed that the Personal Consumption Expenditures (PCE) price index remained at a 2.5% year-over-year pace in February. Yet, the more telling core PCE measure, which strips out food and energy and is the Federal Reserve's preferred inflation gauge, rose from an upwardly revised 2.7% in January to 2.8%, outpacing expectations.

The uptick in core inflation dealt a blow to investor hopes for near-term interest rate cuts, reinforcing the view that the Fed is in no rush to ease policy amid persistent price pressures.

Adding to the jitters, earlier this week, Trump's announcement of a 25% tariff on all foreign auto imports stirred fears of retaliatory trade measures and higher consumer prices.

Investors are now bracing for a potential announcement of "reciprocal tariffs" on April 2, which could further escalate trade tensions and pressure profit margins across multiple sectors.

Stocks Slide, Safe Havens Shine

The S&P 500 index opened lower, with the SPDR S&P 500 ETF Trust SPY down 0.5%. The Nasdaq 100 – as tracked by the Invesco QQQ Trust, Series 1 QQQ – fell 0.8%. The Dow eased 0.3%.

Within mega-cap stocks, Mondelez International Inc. MDLZ was the strongest performer, up 1%, while Target Corp. TGT led among the laggards, down 2.5%.

Gold prices, as mimicked by the SPDR Gold Trust GLD, jumped 0.7% to trade above $3,070 per ounce, setting a new record high. Investors turned to traditional safe havens in reaction to the inflation surprise and rising geopolitical uncertainty.

Bitcoin BTC/USD tumbled 2.2%, flipping to weekly losses.

Investor Sentiment The Most Bearish Since October 2022

The latest AAII Investor Sentiment Survey shows a sharp deterioration in retail investor confidence.January.

“The bull-bear spread of the American Association of Individual Investors (AAII) sentiment survey has fallen
to the lowest level since October of 2022 as those considering themselves bearish far outnumber those that are
expecting gains in the equity market over the next six months,” said Equity Clock in its latest a monthly outlook.

Tariff Tensions Rattle Automakers

Trump's proposed 25% auto tariff sent shockwaves across the U.S. auto industry this week, with legacy carmakers bearing the brunt.

Shares of General Motors Co. GM and Ford Motor Co. F plunged about 6% and 4%, respectively, in Thursday's session.

They were down 0.8% and 1% during early trading Friday, respectively.

In stark contrast, U.S.-based EV manufacturers—building all their vehicles domestically—emerge as winners. Tesla Inc. TSLA, Rivian Automotive Inc. RIVN, and Lucid Group Inc. LCID are all on track to notch their best weekly performance of 2025, as investors bet on their potential insulation from import tariffs.

Read now: