04:43 PM EDT, 03/28/2025 (MT Newswires) -- US benchmark equity indexes and Treasury yields retreated Friday as data showed a surprise acceleration in the Federal Reserve's preferred inflation metric, while markets braced for potentially more tariffs next week.

The Nasdaq Composite declined 2.7% to 17,323, while the S&P 500 slid 2% to 5,580.9. The Dow Jones Industrial Average fell 1.7% to 41,583.9. Barring utilities, all sectors closed lower, led by communication services and consumer discretionary.

For the week, the Nasdaq tumbled 2.6%, while the S&P 500 dropped 1.5%. The Dow decreased 1%.

The Fed's preferred core inflation, as measured by the personal consumption expenditures price index excluding food and energy, accelerated to 2.8% annually in February from the previous month's 2.7% growth. Sequentially, the core measure advanced to 0.4% from January's 0.3% increase.

US consumer spending rebounded last month, though the pace of growth fell short of Wall Street's expectations, government data showed.

"Our current baseline calls for consumer spending growth to slow to 2% this year, and core inflation to breach back above 3% by mid-year," Oxford Economics said. "We think that combination will keep the Fed on extended pause, especially with inflation expectations showing increasing signs of becoming unanchored."

US consumer sentiment fell for a third consecutive month in March as the expectations index slumped and the inflation outlook jumped amid economic policy uncertainties, according to a survey by the University of Michigan.

"This month's decline reflects a clear consensus across all demographic and political affiliations," Surveys of Consumers Director Joanne Hsu said. "Consumers continue to worry about the potential for pain amid ongoing economic policy developments."

US Treasury yields moved down Friday, with the 10-year rate slumping 12 basis points to 4.25% and the two-year rate decreasing 9.2 basis points to 3.91%.

The Trump administration is expected to announce reciprocal tariffs next week.

"We suspect the criteria for US reciprocal tariffs will be much broader than simply matching other countries' tariffs currently imposed on the US," Nomura said in a note. There's "massive uncertainty" regarding the target, size and scope of the anticipated tariffs, the firm said.

Earlier in the week, the White House announced 25% tariffs on imported passenger vehicles and certain auto parts, while Bloomberg News reported that the Trump administration may impose duties on copper imports in the coming weeks. Separately, Trump has said that the US will impose 25% tariffs on countries that purchase oil and/or gas from Venezuela, effective April 2.

In company news, Lululemon Athletica ( LULU ) shares tumbled 14%, the worst performer on the S&P 500. The athletic apparel and footwear company late Thursday provided a fiscal first-quarter outlook below market estimates amid cautious consumer spending.

Amazon.com (AMZN) MGM Studios head Jen Salke is stepping down to begin a new production entity, Reuters reported, citing an internal memo. Amazon ( AMZN ) shares dropped 4.3% Friday, the steepest decline on the Dow.

W. R. Berkley ( WRB ) was the top gainer on the S&P 500, up 7.5%. The company said Mitsui Sumitomo Insurance has agreed to buy 15% of its stock through open market purchases or private transactions with third parties.

AppLovin ( APP ) shares gained 4.1% after the company said it has retained law firm Quinn Emanuel Urquhart & Sullivan to conduct an independent investigation into recent short reports aimed at AppLovin ( APP ).

West Texas Intermediate crude oil dropped 1.1% to $69.14 a barrel Friday.

Gold increased 0.8% to $3,116.40 per troy ounce, while silver fell 0.8% to $34.81 per ounce.

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