US stocks pointed to another rough day on Wall Street Friday after the House of Representatives voted against a Trump-backed spending bill, further increasing the odds of a US government shutdown this weekend.
Investors also digested key inflation data that showed a deceleration in price increases during the month of November after the Federal Reserve lowered the number of cuts it expects next year.
The tech-heavy Nasdaq Composite (^IXIC) led the losses with a decline of 0.8%. The S&P 500 (^GSPC) fell around 0.3% while the Dow Jones Industrial Average (^DJI) also dropped around 0.4%.
A Fed-induced sell-off earlier in the week left the major averages reeling. And although stocks mostly stabilized on Thursday, the threat of a government shutdown, coupled with more Trump tariff threats on Europe, pressured global markets across the board.
“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas,” Trump said in a post on Truth Social. “Otherwise, it is TARIFFS all the way!!!”
Global chip stocks sold off, with Europe’s ASML (ASML) dropping more than 1% early Friday while Taiwan’s TSMC (TSMC34.SA) fell close to 3%. US-based names such as Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) also came under pressure.
Bitcoin (BTC-USD) prices retreated to drop below $95,000 per token amid record ETF outflows.
In individual names, Novo Nordisk (NVO) plunged about 20% — the most in over two decades — after its obesity drug trial disappointed investors. Tesla (TSLA) shares dropped 6% after recalling about 700,000 US vehicles over a tire pressure monitoring system defect.
Meanwhile, investors received another piece of the inflation puzzle with the release of the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index.
The latest reading showed price increases fell month over month in November but still remained sticky as the central bank fights to bring inflation back down to its 2% target.
In November, the core Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely tracked by the Fed, rose 0.1% from the prior month, a deceleration from October’s 0.3% monthly gain in prices. The monthly increase came in slightly lower compared to economist expectations of a 0.2% increase.
Over the prior year, core prices rose 2.8%, matching the increase seen in October and also lower than Wall Street’s expectations of a 2.9% rise. On a yearly basis, overall PCE increased 2.4%, a pickup from the 2.3% seen in October. Economists polled by Bloomberg had anticipated a yearly increase of 2.5%.
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