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US consumer spending rises in February

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US core inflation firmer in February

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Bullion miners track higher gold prices

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Lululemon shares slide after bleak annual outlook

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Indexes off: Dow 0.31%, S&P 500 0.25%, Nasdaq 0.40%

(Updates for market open)

By Pranav Kashyap and Johann M Cherian

March 28 (Reuters) - Wall Street's main indexes took a

step back on Friday, as fresh data highlighted an uptick in

underlying price pressures that surpassed expectations, igniting

concerns that the Trump administration's tariff strategies might

further fan the flames of inflation.

A Commerce Department report showed the Personal Consumption

Expenditures Price index rose in line with what economists

polled by Reuters were expecting.

However, excluding volatile items such as food and energy,

the index rose more than expected on an annual basis in the

previous month, while consumer spending rebounded after falling

in January.

Equities have endured pronounced downturns over the past

month, fueled by apprehensions that President Donald Trump's

policies could usher the economy into an era of elevated

inflation and sluggish growth, potentially casting a shadow over

the Federal Reserve's monetary policy path.

"This data further lends credence to the marginal shift

we're seeing towards a more stagflationary environment," said

Jordan Rizzuto, chief investment officer at GammaRoad Capital

Partners.

"If inflation is picking up or running hotter coming into a

period before we've actually seen the impact from tariffs,

that's rather concerning."

Markets continue to anticipate that the central bank will

reduce borrowing costs by 25 basis points for the first time

this year in July, as per data gathered by LSEG.

Rate-sensitive banking giants such as Citi and Wells

Fargo ( WFC ) each slipped 0.5%.

Trump's unwavering commitment to a 25% tariff on auto

imports, slated to commence next week, has reverberated through

global markets, drawing criticism from lawmakers and industry

leaders worldwide.

Auto stocks absorbed the impact of the previous session's

selloff. General Motors ( GM ) slid 0.7%, while Ford

inched down 0.8%.

All eyes are now on a fresh wave of tariffs the U.S. plans

to unveil on April 2, with Trump hinting that these measures

might deviate from the straightforward tit-for-tat levies

previously promised.

In parallel, a report suggested that the European Union is

contemplating concessions for Trump following the enactment of

reciprocal tariffs.

At 9:41 a.m. ET, the Dow Jones Industrial Average

fell 131.65 points, or 0.31%, to 42,168.05, the S&P 500

lost 14.45 points, or 0.25%, to 5,679.04 and the Nasdaq

Composite lost 71.38 points, or 0.40%, to 17,732.66.

The unpredictability surrounding tariffs has compelled

companies to revise their annual forecasts downward, with

Lululemon Athletica ( LULU ) being the latest to adjust. Shares

of the sportswear maker plunged 11.3%, dragging down the

consumer discretionary sector.

Gold miners Harmony Gold and Gold Fields

were up over 6% each, tracking higher gold prices.

The S&P 500 is confronting its first quarterly decline in

six quarters, while the tech-heavy Nasdaq prepares for its most

substantial quarterly drop in nearly two years.

Investors will also parse through speeches by Federal

Reserve policymakers Michael Barr and Raphael Bostic later in

the day.

U.S. Steel rose 2.8% after a report said Nippon Steel ( NISTF )

and the company are in active talks about a deal that

would preserve their $14 billion merger.

Declining issues outnumbered advancers by a 1.42-to-1 ratio

on the NYSE and by a 1.91-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and one new

low, while the Nasdaq Composite recorded 22 new highs and 80 new

lows.