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US stocks tumble as deepening consumer gloom raises stagflation fears

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US stocks tumble as deepening consumer gloom raises stagflation fears

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Wall Street stocks dropped on Friday as signs of strain among American consumers added to worries the US is heading for a bout of stagflation.

A batch of data on Friday added fresh evidence that consumers are growing deeply concerned about how Donald Trump’s sweeping tariffs will affect the world’s largest economy, while a separate report showed the Federal Reserve’s preferred inflation measure rose in February.

The gloomy data comes at a time when investors are worried that Trump’s trade levies combined with a broader sense of uncertainty will hurt US economic growth while also increasing price pressures. The new reports sent investors rushing away from US equities and into havens.

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Wall Street’s blue-chip S&P 500 was down 2 per cent during mid-afternoon trading on Friday while the tech-focused Nasdaq Composite was 2.6 per cent lower. US government debt rallied, pushing the 10-year Treasury yield down 0.11 percentage points to 4.26 per cent.

“US data is only inflaming stagflation fears,” said James Knightley, an economist at investment bank ING. “Hot inflation and cooling consumer spending are trends that are likely to be intensified by President Trump’s aggressive moves on tariffs and government spending cuts.”

A survey by the University of Michigan released on Friday showed that consumer sentiment plunged in March as Americans worried about their job prospects, inflation and income levels. Households also forecast inflation over the long term of 4.1 per cent, the highest since 1993.

“This month’s decline [in sentiment] reflects a clear consensus across all demographic and political affiliations,” the University of Michigan said.

It added: “Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment and inflation.”

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Consumer spending, meanwhile, rose 0.4 per cent last month, a reversal from January’s 0.3 per cent decline, but not as strong as the 0.5 per cent increase economists forecast, a separate report from the US Bureau of Economic Analysis showed.

Pantheon Macroeconomics’ senior US economist Oliver Allen said the consumer spending data was “disappointing” and that an “underlying slowdown in demand growth also seems to be under way”.

Goldman Sachs cut its forecast for first-quarter GDP in response to the weak data, by 0.4 percentage points to an annualised growth rate of 0.6 per cent, citing “softer than expected” personal spending growth in February and a downward revision to January’s figure.

The Atlanta Fed also cut its running forecast for first-quarter GDP to show a contraction of 2.8 per cent on an annualised basis, compared with 1.8 per cent as recently as Wednesday. Its model has contrasted with Wall Street banks, which broadly still expect growth in early 2025.

The BEA’s report on Friday also showed that the core reading of the personal consumption expenditure (PCE) price index was up 2.8 per cent in February from a year ago.

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Economists expected the index, a measure that is closely watched by the Fed which strips out food and energy, to be up 2.7 per cent, unchanged from January’s upwardly revised rate. The main PCE index rose 2.5 per cent last month, unchanged from January.

The Fed earlier this month boosted its forecast for inflation and cut its growth outlook. Fed chair Jay Powell said at the time that the US economy was still in good shape and the central bank did “not need to be in a hurry” to cut interest rates after reducing them by 1 percentage point last year.

However, the president of the Chicago branch of the Fed, Austan Goolsbee, told the Financial Times this week that the central bank was no longer on the “golden path” of 2023 and 2024 when inflation appeared to be returning to the 2 per cent target without derailing economic growth or lifting unemployment.

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Amazon accused of listing products from independent shops without permission

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Amazon accused of listing products from independent shops without permission

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Amazon has been accused of listing products from independent retailers without their consent, even as the ecommerce giant sues start-up Perplexity over its AI software shopping without permission.

The $2.5tn online retailer has listed some independent shops’ full inventory on its platform without seeking permission, four business owners told the Financial Times, enabling customers to shop through Amazon rather than buy directly.

Two independent retailers told the FT that they had also received orders for products that were either out of stock or were mispriced and mislabelled by Amazon leading to customer complaints.

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“Nobody opted into this,” said Angie Chua, owner of Bobo Design Studio, a stationery store based in Los Angeles.

Tech companies are experimenting with artificial intelligence “agents” that can perform tasks like shopping autonomously based on user instructions.

Amazon has blocked agents from Anthropic, Google, OpenAI and a host of other AI start-ups from its website.

It filed a lawsuit in November against Perplexity, whose Comet browser was making purchases on Amazon on behalf of users, alleging that the company’s actions risked undermining user privacy and violated its terms of service.

In its complaint, Amazon said Perplexity had taken steps “without prior notice to Amazon and without authorisation” and that it degraded a customer shopping experience it had invested in over several decades.

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Perplexity in a statement at the time said that the lawsuit was a “bully tactic” aimed at scaring “disruptive companies like Perplexity” from improving customers’ experience.

The recent complaints against Amazon relate to its “Buy for Me” function, launched last April, which lets some customers purchase items that are not listed with Amazon but on other retailers’ sites.

Retailers said Amazon did not seek their permission before sending them orders that were placed on the ecommerce site. They do not receive the user’s email address or other information that might be helpful for generating future sales, several sellers told the FT.

“We consciously avoid Amazon because our business is rooted in community and building a relationship with customers,” Chua said. “I don’t know who these customers are.”

Several of the independent retailers said Amazon’s move had led to poor experiences for customers, or hurt their business.

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Sarah Hitchcock Burzio, the owner of Hitchcock Paper Co. in Virginia, said that Amazon had mislabelled items leading to a surge in orders as customers believed they were receiving more expensive versions of a product at a much lower price.

“There were no guardrails set up so when there were issues there was nobody I could go to,” she said.

Product returns and complaints for the “Buy for Me” function are handled by sellers rather than Amazon, even when errors are produced by the Seattle-based group.

Amazon enables sellers to opt out of the service by contacting the company on a specific email address.

Amazon said: “Shop Direct and Buy for Me are programmes we’re testing that help customers discover brands and products not currently sold in Amazon’s store, while helping businesses reach new customers and drive incremental sales.

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“We have received positive feedback on these programmes. Businesses can opt out at any time.”

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Trump says Venezuela will turn over 30 million to 50 million barrels of oil to US | CNN Business

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Trump says Venezuela will turn over 30 million to 50 million barrels of oil to US | CNN Business

President Donald Trump said Tuesday night that Venezuela will turn over 30 million to 50 million barrels of oil to the United States, to be sold at market value and with the proceeds controlled by the US.

Interim authorities in Venezuela will turn over “sanctioned oil” Trump said on Truth Social.

The US will use the proceeds “to benefit the people of Venezuela and the United States!” he wrote.

Energy Secretary Chris Wright has been directed to “execute this plan, immediately,” and the barrels “will be taken by storage ships, and brought directly to unloading docks in the United States.”

CNN has reached out to the White House for more information.

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A senior administration official, speaking under condition of anonymity, told CNN that the oil has already been produced and put in barrels. The majority of it is currently on boats and will now go to US facilities in the Gulf to be refined.

Although 30 to 50 million barrels of oil sounds like a lot, the United States consumed just over 20 million barrels of oil per day over the past month.

That amount may lower oil prices a bit, but it probably won’t lower Americans’ gas prices that much: Former President Joe Biden released about four to six times as much — 180 million barrels of oil — from the US Strategic Petroleum Reserve in 2022, which lowered gas prices by only between 13 cents and 31 cents a gallon over the course of four months, according to a Treasury Department analysis.

US oil fell about $1 a barrel, or just under 2%, to $56, immediately after Trump made his announcement on Truth Social.

Selling up to 50 million barrels could raise quite a bit of revenue: Venezuelan oil is currently trading at $55 per barrel, so if the United States can find buyers willing to pay market price, it could raise between $1.65 billion and $2.75 billion from the sale.

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Venezuela has built up significant stockpiles of crude over since the United States began its oil embargo late last year. But handing over that much oil to the United States may deplete Venezuela’s own oil reserves.

The oil is almost certainly coming from both its onshore storage and some of the seized tankers that were transporting oil: The country has about 48 million barrels of storage capacity and was nearly full, according to Phil Flynn, senior market analyst at the Price Futures Group. The tankers were transporting about 15 million to 22 million barrels of oil, according to industry estimates.

It’s unclear over what time period Venezuela will hand over the oil to the United States.

The senior administration official said the transfer would happen quickly because Venezuela’s crude is very heavy, which means it can’t be stored for long.

But crude does not go bad if it is not refined in a certain amount of time, said Andrew Lipow, the president of Lipow Oil Associates, in a note. “It has sat underground for hundreds of millions of years. In fact, much of the oil in the Strategic Petroleum Reserve has been around for decades,” he wrote.

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Video: Nvidia Shows Off New A.I. Chip at CES

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Video: Nvidia Shows Off New A.I. Chip at CES

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Nvidia Shows Off New A.I. Chip at CES

At the annual tech conference, CES, Nvidia showed off a new A.I. chip, known as Vera Rubin, which is more efficient and powerful than previous generations of chips.

This is the Vera CPU. This is one CPU. This is groundbreaking work. I would not be surprised if the industry would like us to make this format and this structure an industry standard in the future. Today, we’re announcing Alpamayo, the world’s first thinking, reasoning autonomous vehicle A.I.

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At the annual tech conference, CES, Nvidia showed off a new A.I. chip, known as Vera Rubin, which is more efficient and powerful than previous generations of chips.

By Jiawei Wang

January 6, 2026

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