U.S. stocks plummeted on Friday as a series of poor economic reports sparked fears of a slowing economy and persistent inflation. The Dow Jones Industrial Average lost 748 points, or 1.69%, to close at 43,428.02. The S&P 500 slid 1.71% to end at 6,013.13, while the Nasdaq dropped 2.2%, settling at 19,524.01.
As bad economic news piles up, Republicans are laser-focused on tax cuts for their billionaire buddies. Zero focus on inflation, housing costs. https://t.co/CDf6G0jFov
— Martin Heinrich (@SenatorHeinrich) February 22, 2025
A final reading of the University of Michigan’s consumer sentiment index fell to 64.7 in February, a decline of nearly 10% from the previous month. Consumers raised concerns about higher inflation ahead, with the five-year inflation outlook rising to 3.5%, the highest since 1995. Existing home sales in the U.S. also fell more than expected last month to 4.08 million units, and the U.S. services purchasing managers’ index dropped, according to S&P Global.
After today, the S&P 500 is down an annualized 86.1% on Friday. Only 1937 was worse.
We've been talking a lot how weakness on Friday has been the play in 2025. News heavy markets = sell ahead of the weekend.
I'll take it as the good news, as it has to improve. Right? pic.twitter.com/rBy2QWPl4i
— Ryan Detrick, CMT (@RyanDetrick) February 21, 2025
Investor Steve Cohen commented on the market from a conference in Miami, saying, “It’s definitely a period where I think the best gains have been had, and [it] wouldn’t surprise me to see a significant correction.”
Investors shifted toward traditionally safer assets, with bond prices climbing 1.8% and gold and other precious metals advancing more than 3% each. The S&P 500 slid about 1.7% for the week, while the Dow and Nasdaq lost 2.5%.
Stocks slump with the S&P 500 wiping out almost all of its gains since Trump took office last month, after a widely watched measure of how consumers feel about the economy showed mounting fears over stubborn inflation. @JARennison https://t.co/c6cwWOXvGO
— Peter Baker (@peterbakernyt) February 21, 2025
Dow declines on economic concerns
Trading in 30-day fed funds futures contracts now suggests roughly 55% odds that the Federal Reserve will cut rates two to three times by the end of the year, compared to 44.4% on Thursday. The S&P 500 materials sector dropped 1.8% on Friday and is now 10% below its high from last October. The consumer discretionary sector is on track for its worst weekly performance in over a year, with a 4.7% loss.
Food stocks and other makers of consumer staples were notable outperformers, with ConAgra, Campbell Soup, Mondelez International, and Kraft Heinz all rising. UnitedHealth Group fell almost 7% after news emerged that the U.S. Department of Justice had launched a civil fraud investigation into the company’s Medicare Advantage plans.
Photo by; sergeitokmakov on Pixabay
