Inflation Watch, Tech Sell-Off and Nvidia's Fall from $3T, China vs. Trump on Tariffs 2/28/25

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Jim Cramer (0:59)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:07)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen at Post 9 of the New York Stock Exchange. Cramer has the morning off. Futures do look to bounce from Thursday's decline as PCE data comes in at least no worse than expected, although personal spending prints its worst decline in three years. Ten years, four and a quarter. Bitcoin briefly drops to 78K. A roadmap begins with a tech trade under pressure. Nvidia's slide looks to continue maybe at the open. Tesla with the second worst month now on record, and Apple now the lone member of the $3 trillion club.

David Faber (1:41)

Plus, Dell and HP shares are sliding ahead of the open this morning. Double delivered a mixed revenue outlook. HP warned that the current environment for trade and how things are changing may weigh on profitability this year.

Sara Eisen (1:52)

And tariff pushback. China vowing to retaliate as Trump vows additional 10% tariffs starting Tuesday.

Carl Quintanilla (2:00)

Let's begin with this market reaction to PCE and core PCE. Three-tenths in line. We watched spending. We said the surprise drop, two-tenths looking for a gain, and then even worse, a once-year count on a real basis. But overall, market doesn't seem to mind it too much.

Sara Eisen (2:15)

It's a big few on inflation because the market was starting to get worried that inflation was getting a little sticky, and the Fed was losing its progress on the disinflation. So it's good affirmation that we're still on trend toward lower inflation, especially that core number, 0.3%.

That's rounded up, so that's good news. And then from a year ago, the increase is 2.6% for PCE. That's the smallest annual increase since early 2021 That's good news when it comes to inflation. The overall number at 2.5%, the Fed's going to like that, right? It's not 2% where the Fed wants it to be, but it also isn't going in the other direction. And it's especially a relief, David, after January. Remember, January came in very hot, and it kind of confirms that idea that some were saying that the seasonality factor plays a role, where January numbers are high in terms of inflationary, and now we're getting back to trend. That's good, although what Carl said on spending, I mean, real inflation-adjusted spending down 0.5%, a disappointment, and it's lower than it was the month before, and it feeds into the view that the consumer is starting to show some weakness.

Carl Quintanilla (3:21)

Yeah, savings rate goes from 3.5% to 4.6% after tax savings, so maybe it's a hangover from the holidays, although maybe the consumer is introducing some more caution.

Sara Eisen (3:32)

I know, one month is not a trend make, right, and maybe there was weather. I mean, you know, that sort of plays into some of these winter months, but it does dive with some of the confidence readings we've had. Consumer confidence from the Conference Board, from the University of Michigan, all a bit weaker. We've had some weaker numbers on services. We had higher jobless claims numbers lately. We have this Philadelphia labor market survey that people are pointing to. It's a short survey. We have only had it since 2023, but it did show a third of people are worried about keeping their jobs. And so people are kind of concerned that maybe the labor market's turning. Next week is going to be so key because we get the unemployment rate and the jobs number at the end of next week. And that's the one the Fed watches to see if they have to go earlier on cuts. The market's starting to price in July now for the first rate cut instead of September, which is where they were.