S&P 500 Index: Auto Tariffs and Core PCE Data Add Early Pressure to US Stocks

Stock Futures Dip as Core PCE Inflation Surprises to the Upside

U.S. equity futures traded lower early Friday following a hotter-than-expected inflation print and persistent tariff concerns. The core personal consumption expenditures (PCE) price index — the Federal Reserve’s preferred inflation gauge — rose 2.8% year over year in February, exceeding economist forecasts and stirring renewed debate about the Fed’s rate-cut timing. Dow futures slipped 31 points, or 0.07%, while S&P 500 and Nasdaq 100 futures declined 0.1% and 0.2%, respectively.

Is Inflation Cooling Fast Enough for the Fed?

While headline PCE inflation matched expectations at 2.5% annually, the stronger-than-expected core figure underscored the sticky nature of underlying price pressures. On a monthly basis, core PCE rose 0.4%, above the forecasted 0.3%. The data raises fresh concerns about whether inflation is cooling fast enough to justify near-term rate cuts, reinforcing cautious sentiment after Thursday’s market retreat. The Dow fell 0.4%, the S&P 500 lost 0.3%, and the Nasdaq dropped 0.5% in the prior session.

How Are Tariffs Feeding Market Uncertainty?

Adding to investor caution was President Donald Trump’s announcement of a 25% tariff on all vehicles and parts not made in the U.S., effective April 2. Automakers reliant on global supply chains came under pressure, with General Motors, Ford, and Stellantis falling 7.4%, 3.9%, and 1.3%, respectively, on Thursday. Pre-market moves showed continued selling. Reports also surfaced that Trump warned automakers against raising prices in response to the tariffs, further unsettling executives and markets.

Which Stocks Are Leading Premarket Moves?

Tesla rose 0.7% in early trading, bucking the auto sector downturn due to its U.S.-based production.

Nvidia dipped slightly after a 2.1% slide Thursday, with investors eyeing CoreWeave’s IPO — priced below expectations at $40 — for further clues on AI-related demand.

Lululemon fell 12% after issuing soft full-year guidance despite a strong Q4. Meanwhile, AppLovin rebounded nearly 9% following a 20% drop triggered by short-seller scrutiny.

U.S. Steel gained 4.4% on optimism around its $14 billion merger with Nippon Steel, and Rocket Lab jumped 7.7% after landing a potential $5.6 billion U.S. Space Force contract.

What Comes Next for Traders?

Markets remain sensitive to any policy clarity, with investors looking to April 2 for signals on inflation direction and trade developments. While some strategists like Fundstrat’s Tom Lee see a high probability of a post-tariff rebound, others warn that volatility is unlikely to subside without more definitive policy guidance. The core PCE surprise and tariff fallout will remain in focus as traders weigh the odds of a Fed pivot and monitor auto sector pricing responses.

More Information in our Economic Calendar.