Stocks slide on weaker US data and tariff uncertainty

Equity markets slid as fresh US data combined the two things investors least want to see together: weaker activity and stickier inflation—now with tariffs acting as an unofficial third policy rate.

Global News reports US stock index futures fell after the Commerce Department’s advance estimate showed fourth-quarter GDP growth slowed to a 1.4% annualized pace, while the Fed’s preferred inflation gauge, core PCE, rose 0.4% month-on-month in December versus 0.3% expected. That “lower growth, higher inflation” cocktail pushed traders to stick with bets for the next Federal Reserve rate cut in June—hardly an endorsement of a clean soft landing.

The more structural drag is policy uncertainty around trade. Global News notes investors were watching for a possible US Supreme Court ruling on President Donald Trump’s tariffs. If the tariffs were struck down, Penn-Wharton Budget Model economists estimate more than $175 billion in tariff collections could have to be refunded. Tariffs are not merely “tough talk” but a cash-flow pipeline from consumers and importing firms to the Treasury—until a court potentially forces an expensive unwind.

Zero Hedge, citing S&P Global’s business activity survey, reports US PMIs fell to 10‑month lows in February, blaming “weather & weak demand.” Weather is the convenient scapegoat; tariffs are the durable one. The plumbing is boring but brutal: tariff threats encourage front-loading (importing early to beat the tax), which whipsaws trade and inventory data; then margins get squeezed as firms either eat the costs or pass them on; then capital expenditure decisions get deferred because nobody builds a factory around a policy that can change with the next press conference.

Protectionism functions like a regressive consumption tax—higher prices on traded goods—and simultaneously like an investment tax—higher uncertainty and lower expected after-tax returns on new capacity. Politicians call this “reshoring.” Markets call it “risk premium.”

The selloff also hit private-capital names after Blue Owl’s move to halt redemptions in one fund spooked investors, with peers like KKR and Apollo lower as well, according to Global News. When liquidity gates start appearing at the same time macro data deteriorates, the ‘everything is fine’ narrative tends to evaporate quickly.

None of this requires a crash. It requires acknowledging that the modern growth story is increasingly a policy variable: a tariff here, a shutdown there, and the economy becomes a spreadsheet of political toggles—priced minute-by-minute by people who still have to make payroll.