Shopify (SHOP) shares plunged 5.97% during intraday trading on Friday, as investors reacted to hotter-than-expected inflation data that raised concerns about economic stability. The e-commerce software platform's stock took a hit following the release of the Federal Reserve's preferred inflation gauge, which came in above analysts' estimates.

The Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) price index, which excludes volatile food and energy prices, rose 2.8% in February 2025 compared to the previous year, surpassing the expected 2.7% increase. On a month-over-month basis, core inflation accelerated by 0.4%, higher than the anticipated 0.3% rise. This unexpected jump in inflation has fueled fears of potential stagflation - a challenging economic scenario characterized by slow growth and rising prices.

Adding to the market unease, ongoing concerns about proposed tariffs have been weighing on stocks throughout the week. The combination of rising inflation and escalating trade tensions has clouded the economic outlook, creating uncertainty for businesses and policymakers alike. Shopify's significant drop reflects the broader market sentiment, with the stock now trading 25.4% below its 52-week high of $129.31 reached in February 2025. Despite the recent volatility, long-term investors may note that $1,000 invested in Shopify five years ago would now be worth $2,242, highlighting the company's historical growth trajectory amidst market fluctuations.