The S&P 500 joined the NASDAQ in correction territory on Thursday, dropping 10% from its record high set three weeks earlier. Despite rebounding with a 2.1% surge on Friday, the index ended the week down about 2.2%, marking its fourth consecutive weekly decline.

The correction may have surprised many investors, given the market’s extended period of strong performance leading up to it. Before this pullback, the S&P 500 had gained a cumulative 53% over 2023 and 2024 without a comparable decline.

Beyond economic reports and earnings updates, investors faced heightened uncertainty amid ongoing tariff disputes and the looming risk of a partial U.S. government shutdown as lawmakers and the White House debated a funding bill.

Inflation data provided some relief, reversing a recent trend of hotter-than-expected readings. Wednesday’s Consumer Price Index report showed core inflation—excluding energy and food—rising at an annual rate of 3.1% in February, down from 3.3% in January and below economists’ forecasts.

Consumer sentiment dropped to its lowest level since November 2022, according to a preliminary University of Michigan survey released on Friday. The index fell sharply from 64.7 in late February to 57.9, a steeper decline than expected, with more respondents citing concerns about rising inflation and unemployment.

Gold prices hit a new record on Friday morning, briefly surpassing $3,000 per ounce for the first time. Silver also surged, climbing above $34 per ounce and nearing a five-month high. Year-to-date, gold prices have risen more than 13%.

While the large-cap S&P 500 entered correction territory, small-cap stocks fared even worse. The Russell 2000 Index fell more than 16% from its November 2024 peak, nearing bear market territory. For the week, the index declined around 1.4%.

Looking ahead, the U.S. Federal Reserve is widely expected to keep interest rates unchanged following its two-day meeting concluding on Wednesday. However, updated economic projections and comments from Chair Jerome Powell could influence markets, as uncertainty lingers over the timing of future rate cuts amid mixed inflation data and ongoing tariff concerns.