US STOCKS-Wall St set for lower open after data fans inflation worries

By Pranav Kashyap and Johann M Cherian

March 28 (Reuters) - Wall Street's main indexes were poised for a lower open on Friday as data showed underlying price pressures rose more than expected last month and fueled concerns that the Trump administration's tariff policies could further stoke 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 2.8% on an annual basis in the previous month, more than forecasts of a 2.7% increase, while consumer spending rebounded after falling in January.

Equities have witnessed sharp declines over the past one month on expectations that President Donald Trump's policies could tip the economy into a period of high inflation and tepid growth, which could also cloud the Federal Reserve's monetary policy trajectory.

"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."

Traders continue to expect the central bank to lower borrowing costs by 25 basis points for the first time this year in July, according to data compiled by LSEG.

Rate-sensitive banks such as JPMorgan Chase JPM.N and Wells Fargo WFC.N slipped 0.6% each, while megacaps including Apple AAPL.O declined 0.9% and Meta META.O lost 0.5%.

Yields on Treasury were largely unchanged after an initial spike, reflecting a sense of caution among investors.

Trump's decision to forge ahead with a 25% tariff on auto imports - set to take effect next week have sent shockwaves through global markets, inciting backlash from lawmakers and industry leaders worldwide.

Auto stocks bore the brunt of the selloff in the previous session. In premarket activity, General Motors GM.N dipped 0.8%, while Ford F.N edged 0.2% lower.

Attention is now firmly on a fresh round of tariffs the U.S. plans to unveil on April 2. Trump hinted that these measures might not be the straightforward tit-for-tat levies he has previously vowed to impose.

At 8:52 a.m. ET, Dow E-minis 1YMcv1 were down 110 points, or 0.26%, S&P 500 E-minis EScv1 were down 20.5 points, or 0.36% and Nasdaq 100 E-minis NQcv1 were down 99 points, or 0.50%.

Economic uncertainty as a consequence of tariffs have also forced companies to lower their annual forecasts, with Lululemon Athletica LULU.O being the latest to do so. Shares of the sportswear maker slid 11.3%.

Gold prices scaled yet another peak due to ongoing uncertainty on the tariff front, sending miners of the yellow metal such as Harmony Gold HMY.N and Gold Fields GFI.N up about 4.6% each. [GOL/]

The S&P 500 .SPX and the Nasdaq .IXIC have fallen by 10% from their respective record highs, thus entering technical correction territory earlier in the month.

The S&P 500 is facing its first quarterly setback in six quarters, while the tech-laden Nasdaq braces for its most significant quarterly dip 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 X.N rose 4.7% after a report said Nippon Steel 5401.T and the company are in active talks about a deal that would preserve their $14 billion merger.