Today’s Market Wrap-Up: Inflation, Tariffs, and Market Moves
It was a tough day on Wall Street. The Dow dropped 715 points, the S&P 500 fell nearly 2%, and the Nasdaq lost over 2.7%. Tech stocks took the hardest hit, with Alphabet, Meta, and Amazon leading the declines.
The main culprits? Inflation and tariffs. The latest Personal Consumption Expenditures (PCE) report showed prices rising 2.8% year-over-year, a bit hotter than expected. Long-term inflation expectations also hit their highest level since 1993. Combined with ongoing tariff concerns, uncertainty took the market lower.
But remember — market volatility often reflects uncertainty, not necessarily long-term decline. Staying diversified and focusing on your financial goals can help you weather the ups and downs.
Next week, I’ll be keeping an eye on further tariff announcements and consumer spending updates — both could shape market sentiment moving forward.
A federal judge agreed Friday to block the Trump administration from dismantling the Consumer Financial Protection Bureau, an agency that was targeted for mass firings before the court’s intervention.
U.S. District Judge Amy Berman Jackson agreed to issue a preliminary injunction that maintains the agency’s existence until she rules on the merits of a lawsuit seeking to preserve the agency. The judge said the court “can and must act” to save the agency from being shuttered.
Jackson ruled that, without a court order, President Donald Trump’s administration would move quickly to shut down the agency that Congress created in the wake of the 2008 financial crisis.
“If the defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it, and as the defendants’ own witness warned, the harm will be irreparable,” Berman Jackson said in her order.
Deepak Gupta, an attorney for the plaintiffs, said in a statement that the ruling “blocks the unprecedented plan to dismantle the CFPB — an agency that Congress created to protect Americans’ financial security. This ruling upholds the Constitution’s separation of powers and preserves the Bureau’s vital work.
“We’re heartened by the decision and look forward to continuing to press our case in court,” Gupta said.
During a March 10 hearing, Jackson heard testimony about the chaos that erupted inside the agency after government employees were ordered to stop working last month. The bureau’s chief operating officer, Adam Martinez, said the agency was in “wind-down mode” after Trump fired its previous director, Rohit Chopra, on Feb. 1.
Trump installed a temporary replacement who ordered the immediate suspension of all agency operations, cancelled $100 million in contracts and fired 70 employees.
Martinez said the agency’s current leaders have adopted a more methodical approach than they initially did last month, when representatives of Elon Musk’s Department of Government Efficiency arrived at its Washington headquarters.
CFPB is responsible for protecting consumers from financial fraud and deceptive practices. It processes consumer complaints and examines banks to protect student loan borrowers.
The National Treasury Employees Union, which represents more than 1,000 workers at the bureau, sued on Feb. 9 to block mass firings. Plaintiffs’ attorneys argue that the administration doesn’t have the constitutional authority to eliminate an agency that Congress created by statute.
“The defendants’ unlawful action will have immediate consequences for the Americans that the CFPB was designed by Congress to protect,” the lawyers wrote.
Government lawyers have said the plaintiffs are seeking to impermissibly place the CFPB in a “judicially managed receivership,” with the court overseeing its day-to-day operations.
Jackson started her 112-page ruling by quoting Trump and his allies’ own words about the bureau. Trump’s billionaire adviser, Elon Musk, posted “CFPB RIP” on X, his social media platform, and added an emoji of a tombstone. White House budget director Russell Vought said it has been “a woke and weaponized agency against disfavored industries and individuals for a long time.” Trump called it “a very important thing to get rid of.”
“In sum, the Court cannot look away or the CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion,” Jackson wrote.
Among the plaintiffs was 83-year-old Eva Steege, a Lutheran pastor in hospice care who had been working with CFPB to resolve her student loan debt before her death. The agency found she qualified for loan forgiveness and a $15,000 refund of overpayments, but the stop-work order went into effect before she could have a follow-up meeting, and the official she was working with was fired.
“Steege’s fear of leaving her surviving family members saddled with her student loan debt came to pass on March 15, when she died,” the judge wrote.
The war against inflation has not yet been won. As a result, consumers are still in the trenches. Elevated prices are the culprit.
Just like consumers, the Federal Reserve has been hoping for better progress on inflation. Their preferred measure, the Core Personal Consumption Expenditures price index, has been stuck above their 2% price target. That’s seen in the latest reading with a year-over-year increase of 2.8%, rising from the previous month. This throws some cold water on hopes for an interest rate cut in the near-term.
Making matters worse, the Trump administration is signing consumers up for more bad news on prices, given that tariffs are taxes on goods imported into the U.S.
Consumers have expressed their concern in deteriorating sentiment surveys. Indeed, the University of Michigan's closely watched March survey finds that "Consumer sentiment confirmed its early month reading and fell for the third straight month, plummeting 12% from February."
The risk is that this goes beyond attitudes and infects behavior. Spending was outpaced by incomes in February, suggesting some consumers are opting to go to the sidelines to wait for more clarity on prices and taxes on imports. Spending adjusted for inflation was up 0.1% in February. Many are also worried about job security as hiring slows and job cuts dominate headlines.
Consumer Sentiment Falls, Long-Term Inflation Expectations Hit 32-Year High
The University of Michigan’s final March reading of consumer sentiment came in at 57, down sharply from 64.7 in February and well below expectations. The expectations index plunged nearly 18%, reflecting rising pessimism about personal finances, business conditions, and job prospects. Two-thirds of consumers now expect unemployment to rise in the next year - the highest reading since 2009. Long-term inflation expectations surged to 4.1%, a level not seen since 1993, while short-term inflation expectations jumped to 5.0%, the highest since 2022.
While the Fed tends to downplay this survey as an outlier, the University of Michigan’s data shows long-run expectations have now jumped three consecutive months—this time to their highest level in 32 years. That’s not something we can easily dismiss. In fact, this morning’s PCE inflation data showed core prices rising 0.4% month-over-month and 2.8% year-over-year, the fastest pace in a year. Consumer spending barely increased, climbing just 0.1%, despite nominal income gains. These inflation pressures are real, and consumers are feeling it.
Sentiment and inflation expectations are measured through direct monthly surveys of around 500 U.S. households. Unlike consumer confidence (published by the Conference Board), which focuses on current conditions and labor markets, consumer sentiment captures emotional and financial outlooks—including inflation, jobs, and household finances. That makes it particularly useful for anticipating discretionary spending trends.
And according to the report, high-income households (who have historically propped up consumer spending) showed the sharpest drop in sentiment. That should raise red flags for sectors reliant on discretionary spending, from luxury retail to travel.
For businesses, this sentiment collapse signals a potential retrenchment in demand, especially if inflation fears and labor market uncertainty persist. Consumers, already pulling back, may start saving more and spending less, especially on big-ticket items.
At Havas Edge, we track consumer sentiment closely because it often provides an early signal of turning points in behavior - especially when confidence is replaced by caution. In marketing, timing matters. And right now, all signs point to a consumer who is anxious, uncertain, and increasingly cost-conscious.
Even if you’re not in the market for a new car, U.S. President Donald Trump’s 25% tariffs on auto imports could make owning one more expensive.
The new taxes, which are set to begin April 3 and expand in the following weeks, are estimated to raise the average cost of a car imported from another country by thousands of dollars. But repairs for vehicles that currently use foreign-made parts are also expected to get pricier — and, as a result, hike insurance costs farther down the road.
While the White House says these tariffs will foster domestic manufacturing and raise $100 billion in revenue annually, economists stress that straining the auto industry’s global supply chain brings significant disruptions. Dealerships and car repair shops will likely have little choice but to raise prices, leading drivers across the country to pay more for everyday maintenance.
Here’s what you need to know.
How will tariffs affect my next car repair?
It depends on what you need fixed and where you go to get your car serviced. But some industry analysts warn that drivers could see costs jump as early as the coming weeks or months.
“If you are bringing your car to get repaired, chances are, it’s going to have a part that comes from another country,” said Jessica Caldwell, head of insights at auto-buying resource Edmunds. “That price that you pay is likely going to be directly affected by the increase (from these tariffs).”
Trump’s Wednesday proclamation on auto tariffs points specifically to engines, transmissions, powertrain parts and electrical components. That covers a lot of repairs as is, Caldwell notes, and the administration has also signaled the possibility of future expansion.
And while automakers may develop new pricing strategies for new vehicles impacted by tariffs, Caldwell expects they will to be less likely to absorb the costs of individual parts — leaving consumers with the bill perhaps more imminently.
Much of the car repair market has heavily relied on imports, particularly from America’s biggest trading partners. According to February numbers from the American Property Casualty Insurance Association, a trade group that represents home, auto and business insurers, about 6 in every 10 auto replacement parts used in U.S. auto shop repairs are imported from Mexico, Canada and China.
“You can’t walk into a dealership today and not see a United Nations of parts,” said Skyler Chadwick, director of Product Consulting at Cox Automotive. But sourcing and supply vary between each servicer, he adds, making it all the more complex to nail down when exactly prices will rise after these tariffs take effect.
Desiree Hill, owner of Crown’s Corner, an auto repair and mechanics shop in Conyers, Georgia, says the auto tariffs were already hurting her business. She was working on repairing a vintage 1960 Opel Rekord car and ordered a part from Germany, but the manufacturer canceled the order due to the tariffs.
“I can’t get (the part) anywhere in our country. Period. So that was very disappointing,” she said.
About half of the cars she works on are foreign-made, so the tariffs will make repairing those cars more difficult.
“Unfortunately, we don’t have a choice but to raise prices if they are raised on us,” she said. “We can’t take that kind of loss.”
Car repair prices have already been on the rise for years, with analysts pointing both to growing labor costs and more expensive components needed for vehicles with advanced technology.
Edward Salamy, executive director of the Automotive Body Parts Association, also says car companies have been trying to “gain a monopoly” to limit remedies to their own parts or processes, reducing options for consumers.
Tariffs, he said, will just exacerbate the issue: “Many of these distributors will have no choice but to raise their list price.”
How are car dealerships managing?
Joshua Allrich, who operates a family-owned used car dealership called Allrich Auto in Atlanta, is among those concerned about facing higher costs while also trying to save his customers money.
“It’s going to make things a lot more expensive,” Allirch said, adding that, while he’s looking forward to the possibility of people rushing to buy cars before the tariffs take effect, his business will soon have to adjust. “My wheelhouse is economy cars, affordable cars. And now, this tariff is going to directly hit us because it’s gonna just make things go up.”
Chadwick says that dealers and other servicers will need to be as transparent as possible as these tariffs take effect while also preparing to have difficult conversations about rising prices with customers.
He adds that tariffs are also going to put pressures on the reselling market. Used cars often have to be serviced before dealerships can sell them back to customers — again opening the door for higher repair costs due to tariffs. And “all that cost goes right back into the consumer” through what they end up having to pay for the vehicle, he explains.
In efforts to delay impacts, some dealers and repair shops might turn to stocking up on inventory before tariffs hit, particularly for parts that get requested the most. Analysts say many have long-anticipated the threat of auto tariffs, and are already grappling with the impact of Trump’s new steel and aluminum levies that took effect earlier this month.
But stockpiling can only go so far. And for small business owners, spending money on a lot of inventory at once can be risky, especially when Trump’s on-again, off-again tariff threats raise questions about how long they will last.
If they end up being short-lived, Caldwell said, “Do you really want to buy a bunch of inventory that you’re going to have to sit and hold on to for quite some time?”
What will happen to my insurance premiums?
Because accidents involving new parts will see increased costs for repairs, insurance premiums will also likely rise due to tariffs.
But that may be farther into the future. Bob Passmore, department vice president of personal lines at the American Property Casualty Insurance Association, expects consumers to see an impact on their insurance bill in 12 to 18 months at a minimum. That’s because increased prices have to hit claims costs, then be implemented after new rates are filed and approved.
Still, the trade association has estimated that personal auto insurance claims costs alone could rise a total of between $7 billion and $24 billion annually.
It wasn’t immediately clear how large providers of auto insurance were preparing for the impacts of these tariffs. Allstate, State Farm, Geico and Progressive did not immediately respond to The Associated Press’ requests for comment on Friday.
But even if it takes a long time to trickle down, these tariff-related hikes would again arrive, as consumers have already faced rising insurance costs. The Insurance Information Institute estimated average U.S. auto premiums increased 14% in 2023 and 12% in 2024.
Mark Friedlander, the institute’s senior director of media relations, said via email that the research trade nonprofit projected a 7% average premium increase for auto insurance across the U.S. in 2025 at the start of the year — but that didn’t account for potential tariff impacts, which will drive them even higher.
Increased costs spanning from tariffs cause a “chain reaction for insurance,” Caldwell adds. “This is a total ownership cost increase, rather than just a purchase increase.”