By Yasin Ebrahim

Investing.com – The S&P 500 fell for the second-straight week Friday as selling intensified into the close on signs elevated inflation is hurting the consumer as the Russia-Ukraine war is set roll into its third week ahead of the Federal Reserve rate hike.    

The dropped 1.3%; the plummeted 0.7% or 230 points; the plunged 2.2%.

The broader market fell as consumers discretionary stocks were weighed down by investors who analyzed data that pointed to a dip in consumer sentiment following a spike in inflation which accelerated after the Russia-Ukraine conflict.  

Tesla (NASDAQ:) Las Vegas Sands (NYSE:) Etsy Inc (NASDAQ:) was the leader in losses among consumer discretionary stocks. The latter fell by over 11%.

The March University of Michigan Consumer Sentiment indicator, which is negatively correlated to inflation, fell from 62.8 to 59.7 in September 2011, the lowest level since September 2011.

“This latest leg down [in the survey] surely reflects the recent spike in gasoline prices since the beginning of the Russia-Ukraine war,” Jefferies said in a note.

After positive signs from Russia President Vladimir Putin in the peace negotiations with Ukraine, there were signs of consumer weakness that overshadowed hope for an agreement between Russia and Ukraine on a ceasefire.

President Joe Biden continued to up the ante on Moscow, calling on lawmakers to revoke Russia’s “most favored nation” status, which could end normal trade with Russia, leading to higher tariffs.

Gains in technology made a few days earlier were not sustainable as the sector recommenced its slide. Technology is mostly in red with Apple (NASDAQ.) and Meta Platformss (NASDAQ.) being the largest decliners.

Meta was also pressured by concerns that user growth could slow even further after Russia restricted access to the social media giant’s Instagram platform and launched a criminal probe in the company.

The investigation was opened after the social media giant changed its policy on hate speech to allow statements such as “death to Russian invaders” on its platforms.

The weakness in the broader market comes just a week ahead of the Federal Reserve’s two-day meeting, which gets underway on March 15.

Jerome Powell, Federal Reserve Chairman, has supported a quarter-point rate increase and indicated that talks would be initiated by the Fed to reduce its balance sheets.

“Chairman Jay Powell will be walking a tightrope, balancing the needs to raise rates and rein in a more systemic rise in inflation with the need to avert a meltdown in credit markets,” said Diane Swonk, chief economist at Grant Thornton.