The S&P 500 (SPX) opened Friday’s trading session in the red and has since trended lower following a concerning U.S. trade deficit update.
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During the month, imports jumped by $18.6 billion to $281.5 billion while exports fell by $0.1 billion to $178 billion. Overall, the trade deficit increased by $18.7 billion month-over-month, or 22.1%, to $103.6 billion. That’s much higher than the consensus estimate of $89.45 billion.
Imports Pressure GDP as Inflation Gauge Rises to Highest Level Since February
In the first quarter, businesses rushed to front-run imports ahead of President Trump’s tariffs, contributing to a 0.5% fall in gross domestic product (GDP). This dynamic may be playing out again in the third quarter in light of new tariff rates announced earlier this month.
Elsewhere, the personal consumption expenditures (PCE) index increased by 0.3% month-over-month and 2.6% year-over-year, matching economist estimates. Core PCE, which excludes volatile food and energy prices, rose to a five-month high of 2.9% on an annual basis and was in line with the economist estimate as well.
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