Specialist traders work inside a post on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
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 intensified 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 748.63 points, or 1.69%, to close at 43,428.02. Friday’s decline, its worst in the young year, brought its two-day losses to roughly 1,200 points. The S&P 500 slid 1.71% to end at 6,013.13, marking a second negative session after the index closed at a record on Wednesday. The Nasdaq Composite dropped 2.2%, settling at 19,524.01.
A volley of 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 February, a decline of nearly 10% and a steeper drop than expected as consumers raised concerns about higher inflation ahead from possible new tariffs. The five-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 fell 2.5%, marking a second day of declines after the company issued a weaker-than-expected forecast that also soured the outlook for the consumer and the economy.
Prominent investor Steve Cohen shared some negative comments on the market and economy from a conference in Miami.
“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,” Cohen said, citing proposed tariffs dragging on the economy, as well as some of the government’s cost-cutting efforts.
Investor favorites such as Nvidia and Palantir saw steep losses on Friday as traders shifted toward traditionally safer assets. Procter & Gamble climbed 1.8%, while General Mills and Kraft Heinz advanced more than 3% each.
For the week, the S&P 500 slid about 1.7%, while the Dow and Nasdaq both lost 2.5%.
“The top 20 performers in the S&P 500 today are all from defensive sectors: consumer staples, utilities and healthcare,” said Larry Tentarelli, chief technical strategist and founder of the Blue Chip Daily Trend Report. “Investors often rotate into these so-called defensive sectors when economic growth concerns appear.”
Correction: An earlier version misstated the month for the latest release of the University of Michigan’s consumer sentiment index.
