Fri Dec 20 13:10:00 UTC 2024: ## Wall Street Plunges on Inflation Fears, Government Shutdown Looms, and Trump’s Tariff Threats

**New York, NY –** Wall Street futures plummeted Friday, driven by a confluence of negative factors: looming inflation data, the potential for a US government shutdown, and renewed threats of a trade war with the European Union.

The Dow futures fell 0.4%, S&P 500 futures dropped 0.5%, and Nasdaq 100 futures slid 0.8% before the market opened. This follows a week of steep losses for major indices, with the S&P 500 and Dow Jones Industrial Average each down over 3% and the NASDAQ Composite down over 2%.

Investors are anxiously awaiting the release of the core Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. Economists predict a 2.9% annual increase, up from 2.8% the previous month. A stronger-than-expected rise could significantly impact markets, especially after the Fed signaled a slower pace of rate cuts in 2025 earlier this week, suggesting a more hawkish stance.

Adding to the market’s woes is the imminent threat of a partial US government shutdown. A Republican spending bill, endorsed by Donald Trump, failed to pass Congress Thursday, leaving funding to expire at midnight Friday. This could affect the pay of over 2 million federal workers and, according to Goldman Sachs, reduce quarterly GDP growth by 0.15 percentage points per week of shutdown.

Further fueling market uncertainty, President Trump threatened to impose tariffs on the European Union unless it significantly reduces its trade deficit with the US by purchasing more American oil and gas. This adds to concerns of escalating trade tensions, potentially sparking a wider trade war.

Crude oil prices also fell, mirroring the broader market downturn, driven by a stronger dollar and weakening demand. The US crude futures (WTI) dropped 2.3% to $68.97 a barrel, and Brent crude fell 0.6% to $72.47.

Besides the core PCE index, investors are also monitoring the University of Michigan’s consumer sentiment index and keeping a close eye on companies like FedEx and Nike. The overall market sentiment remains deeply negative as the holiday season approaches.

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