Last week witnessed a downturn in the stock market, driven by uncertainties surrounding tariff policies and their potential impact on economic growth. The S&P 500 experienced a decline exceeding 3%, while the Dow Jones Industrial Average dropped more than 2%, losing approximately 1,000 points. The Nasdaq Composite faced the steepest losses, falling nearly 3.5%, marking a significant correction from its peak in December. Investors are now closely monitoring key economic indicators to gauge how tariffs might influence inflation and overall economic health.

Inflation data will be a focal point this week, with updates on the Producer Price Index (PPI) and Consumer Price Index (CPI) providing crucial insights. Analysts anticipate that February's CPI will show an annual inflation rate of 2.9%, down from January's 3%. On a month-over-month basis, prices are expected to rise 0.3%, lower than the 0.5% increase observed in January. Additionally, core CPI, which excludes volatile food and energy prices, is forecasted to have risen 3.2% year over year, slightly below the previous month's figure. These figures will offer early indications of how tariffs may affect inflation trends in the coming months.

The recent market volatility reflects broader concerns about economic performance. Despite weaker-than-expected economic data, most economists do not foresee an imminent recession. Instead, they predict a slowdown in growth rather than a full-blown downturn. Companies also appear to share this cautious optimism, as mentions of "recession" during earnings calls remain relatively low. This suggests that while uncertainty looms, businesses and analysts believe the economy can navigate current challenges without a severe contraction. As markets adjust expectations, the focus remains on navigating through periods of economic transition with resilience and adaptability.