Dow drops 700 points for worst day of 2025 so far on new fears about economic growth
Stocks sold off on Friday as new U.S. data sparked concern among investors over a slowing economy and sticky inflation, leading them in search of safer assets.
Stocks sold off on Friday as new U.S. data sparked concern among investors over a slowing economy and sticky inflation, leading them in search of safer assets.
Losses increased into the close as traders feared staying long into a weekend that could bring another barrage of headlines from the Trump administration, which has proposed a flurry of tariffs and other market-moving policy changes since taking charge a month ago.
The Dow Jones Industrial Average lost 748 points, or 1.7%, bringing its two-day losses to more than 1,200 points. Friday’s loss was its biggest of the young year. The S&P 500 traded 1.7% lower, falling for a second day after closing at a record on Wednesday. The Nasdaq Composite dropped more than 2%.
A series of economic data raised new concerns about the economy and sent investors into bonds, which caused yields to tumble. The University of Michigan consumer sentiment index fell to 64.7 in January, a decline of 10% and a steeper drop than expected as consumers raised concerns about higher inflation ahead from possible new tariffs. The 5-year inflation outlook in the survey was 3.5%, the highest since 1995. On top of that, existing home sales in the U.S. fell more than expected last month to 4.08 million units. The U.S. services purchasing managers index also dropped into contraction territory for February, according to S&P Global.
Walmart shares were down for a second day after the company issued a weaker-than-expected forecast that also soured the outlook for the consumer and the economy.
Rating: 5