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
US stock markets fell sharply Friday after an economic report showed American consumers are growing increasingly fearful of price increases and how President Donald Trump’s tariffs could reignite the inflation crisis. The Dow Jones Industrial Average fell 748 points, or 1.7%. The broader S&P 500 also sank 1.7% and the Nasdaq was 2.2% lower.
Stock Market LIVE: Sensex crashes 750 points, Nifty below 22600; IT index down 2.5% https://t.co/UGlBqP1G85
— ET NOW (@ETNOWlive) February 24, 2025
The report, released Friday, showed that US consumer sentiment declined in February for the second consecutive month, down by a steep 10% from January. That was double the decline initially reported earlier this month. The survey found that Americans are losing confidence in the economy, driven primarily by worries over Trump’s tariffs potentially jacking up prices.
Stock Market Crash Today: Monday Mayhem! Sensex, Nifty 50 down 1% each – Key reasons behind fallhttps://t.co/jBjzOjXpUH
— ET NOW (@ETNOWlive) February 24, 2025
A new poll released Thursday similarly showed that nearly two-thirds of US adults nationwide, 62%, said they feel Trump isn’t doing enough to address inflation. The Michigan survey showed that Americans are now fearful of higher inflation on the horizon. Investors grew concerned that weak consumer sentiment could lead to a pullback in Americans’ shopping habits, which make up more than two-thirds of the US economy.
Although there’s no evidence that a recession is on the horizon, economic data has weakened in recent months.
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
Tariff fears weigh on investors
Job growth has fallen off over the course of the past year as employers wait to see what the Trump administration’s economic policy will bring – particularly around tariffs, which could severely impact companies’ bottom lines.
Housing continues to slow down: a National Association of Realtors report Friday showed that sales of existing homes fell 4.9% in January from the previous month, while prices shot up to a record high for the month, exacerbating America’s home affordability crisis. Retail sales have also dropped recently. Walmart, for example, warned that its sales and profit growth would slow this year – a surprise to many on Wall Street who bet that Walmart’s low prices on essentials would continue to drive the company’s stellar growth over the past several years, even during the worst of the inflation crisis.
The retailer blamed consumer fears over rising prices and tariffs for its lackluster growth forecast. The University of Michigan survey found that the drama surrounding tariffs has affected Americans’ perception of prices. Expectations for inflation in the year ahead surged this month to 4.3%, according to the Michigan survey, up a full percentage point from January to the highest level since November 2023.
Also dragging down stocks was UnitedHealth, a key Dow component, which sank 7% on a report that the US Department of Justice is investigating the company for its Medicaid billing practices. The company strongly denied the report. Despite the plunge, stocks are still very close to their all-time highs.
The S&P 500 hit a record on Wednesday before falling back slightly on Thursday.
