Wall Street ended its second losing week in a row on Friday on a sell-off in tech stocks and ahead of next week’s Federal Reserve policy meeting.
The S&P 500 fell 0.6 per cent to drop below 5,120, while the tech-heavy Nasdaq 100 fell more than 1 per cent. The Dow Jones Industrial Average was down 0.5 per cent.
Technology stocks pulled down the market. Software maker Adobe slumped 13.7 per cent after giving investors a weak revenue forecast. Microsoft fell 2.1 per cent and Broadcom lost 2.1 per cent.
Communication services stocks also pulled the market lower. Meta Platforms fell 1.6 per cent and Google parent Alphabet fell 1.3 per cent.
“Uncertainty about the future of the US central bank’s policy has prompted investors to lower their expectations for a June interest rate cut,” said Rania Gule, market analyst at XS.com.
“Given that readings of both US consumer and producer price indices show a pickup in stubborn inflation, Federal Reserve policymakers will be likely to refrain from easing monetary policy during next week’s meeting.
“The next Fed meeting is scheduled for March 19 and 20, with market focus expected to be significant, potentially constraining price movements during the beginning of next week.”
The latest pullback for stocks came as investors reviewed reports showing that inflation, although cooling, remains stubborn.
A report from the University of Michigan showed that consumer sentiment fell unexpectedly in March.
Inflation remains the big concern for Wall Street amid hopes for the Federal Reserve to start cutting interest rates.
The Fed sharply raised interest rates starting in 2022 to tame inflation back to its 2 per cent target. Inflation at the consumer level was as high as 9.1 per cent in 2022.
A report on consumer prices this week showed inflation remains stubborn, ticking up to 3.2 per cent in February from 3.1 per cent in January.
Another report on prices at the wholesale level also showed inflation remains hotter than Wall Street expected.
US producer price inflation jumped to 0.6 per cent on a monthly basis in February, and to 1.6 per cent on a yearly basis.
A rally for stocks that started in October has stalled in March as investors try to determine the path ahead for inflation, the Fed and the economy.
Fed officials will give their latest forecasts for where they see interest rates heading this year on March 20.
The central bank is widely expected to hold rates steady at its policy meeting next week, but investors will be watching the central bank's economic projections, including its interest rate forecast.
Officials last released quarterly forecasts in December, anticipating three quarter-point cuts in 2024, and they’re set to release an update of those projections on March 20.
Traders are still leaning towards a rate cut in June, according to data from CME Group.
Markets are pricing in a 59.2 per cent chance for a rate cut of at least 25 basis points (bps) by the Fed in June, down from 59.5 per cent in the prior session and 73.3 per cent a week ago, according to CME's FedWatch Tool.
We will walk into next week’s FOMC meeting with a hawkish tilt knowing that it’s always better for the Fed not to act too early than to be forced to make a U-turn on the way
Ipek Ozkardeskaya,
senior analyst, Swissquote Bank
Lower rates would relieve pressure on the economy and financial system.
“All eyes are on next week’s Federal Open Market Committee meeting. The Fed will update its dot plot having seen a two-month jump in inflation, robust jobs data, a relatively strong gross domestic print and healthy earnings,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“There is a chance that we see the median forecast show no more than two rate cuts pencilled in by the Fed members for the year – instead of three plotted at December’s dot plot. We will walk into next week’s FOMC meeting with a hawkish tilt knowing that it’s always better for the Fed not to act too early than to be forced to make a U-turn on the way.”
Meanwhile, bond yields edged higher. The yield on the 10-year Treasury rose to 4.31 per cent from 4.29 per cent late Thursday.
The yield on the two-year Treasury, which typically moves in step with interest rate expectations, rose 4.73 per cent from 4.69 per cent.
The dollar rose and was on track for its strongest week since mid-January.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
Ponti
Sharlene Teo, Pan Macmillan
How to get there
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Director: James Cameron
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