Stocks took a hit today, and it doesnt look like things will be calming down anytime soon. The Dow Jones Industrial Average (DIA) dropped 1%, while the S&P 500 (SPY) and Nasdaq Composite (NASDAQ:QQQ) fell by 1.14% and 1.56%, respectively at 10.25am today. Consumer sentiment is sliding, with the University of Michigans latest survey showing a drop to 57 in Marchmarking the third straight month of weakening outlook. Inflation expectations for the year ahead surged to 5%, and its clear consumers are feeling the pinch. Rosenberg Research's David Rosenberg is calling itcracks are starting to show in consumer spending, and theyre coming from the top down. The high-end consumer market is starting to buckle, and thats a warning sign for the broader economy.

Inflation's not going anywhere, and its showing up in the numbers. The February Personal Consumption Expenditures (PCE) data came in hotter than expected, with a 0.4% monthly increase in core PCEhigher than the 0.3% forecast. Year-over-year, core PCE climbed to 2.8%, raising more questions about the Feds next move. Even though consumer spending increased by 0.4%, it wasnt as strong as expected. This mixed data is leaving investors wondering if the Fed will raise rates sooner than anticipated, which could cause further turbulence in the market. Were seeing inflation hold firm, and that means the Fed's policy decisions will be critical to how stocks react in the short term.

And just when you think its all about inflation, trade tensions are making the situation even messier. Trumps proposed 25% tariff on cars not made in the U.S. is already shaking up the auto industry, and its not looking like things will settle anytime soon. Reports suggest the EU is trying to find a way to ease these tariffs, but its a tough road ahead. With tariffs escalating in early April and no clear resolution in sight, theres more volatility to come. Investors should buckle upthis markets ride is about to get bumpier.