The Dow Jones Industrial Average fell sharply on Friday, dropping 748 points or 1.7%. The broader S&P 500 also sank 1.7%, while the Nasdaq Composite was down 2.2%. This marked the second consecutive day of significant losses for the Dow, which fell about 1,200 points throughout Thursday and Friday.
????Nifty closes flat, down 70 points off day's high
Here's how the market panned out today!
#Nifty #StockMarket pic.twitter.com/YL1vct3Pn3
— ET NOW (@ETNOWlive) February 27, 2025
The stock decline was driven by growing fears among American consumers about rising prices and the potential impact of President Donald Trump’s tariffs on inflation. A survey released Friday showed that US consumer sentiment declined by 10% in February compared to January, double the initial decline reported earlier in the month. The survey found that Americans are losing confidence in the economy due to worries over tariffs potentially driving up prices.
Sensex Today, Stock Market LIVE Updates Feb 27: Sensex, Nifty trade listless; Bajaj twins rally nearly 3%#Sensex #Nifty #StockMarket https://t.co/177HNaRROX
— ET NOW (@ETNOWlive) February 27, 2025
A separate poll released on Thursday revealed that 62% of US adults feel President Trump is not doing enough to address inflation. The University of Michigan survey also showed that Americans fear higher inflation shortly.
Defensive trades gaining steam with Cons Staples leading today and Health Care maintaining lead YTD … NASDAQ down most today and down by 3.1% MTD; Russell 2000 Growth down most MTD pic.twitter.com/daCiGoHntX
— Liz Ann Sonders (@LizAnnSonders) February 25, 2025
Fears rise amid looming tariffs
Investors are concerned that weakening consumer sentiment could lead to a slowdown in consumer spending, which accounts for more than two-thirds of the US economy. Although no signs of an imminent recession exist, recent economic data has been less robust. Job growth has slowed over the past year as companies wait to see the impact of the Trump administration’s economic policies, particularly tariffs, which could significantly impact their profits.
According to a report from the National Association of Realtors, the housing market continues to cool, with sales of existing homes falling 4.9% in January compared to the previous month. At the same time, prices reached a record high for the month, further exacerbating the affordability crisis in the US housing market. Retail sales have also declined recently, with Walmart indicating that its sales and profit growth will slow this year, surprising many on Wall Street who expected the retailer’s low prices to continue driving strong growth.
UnitedHealth, a significant component of the Dow, also contributed to the decline, falling 7% following a report that the US Department of Justice is investigating the company’s Medicaid billing practices. UnitedHealth strongly denied the allegations. Despite the sharp drop, US stocks remain close to their all-time highs, with the S&P 500 hitting a record on Wednesday before pulling back slightly on Thursday.
