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
U.S. stocks plummeted on Friday as a series of disappointing economic reports sparked fears of slowing growth and persistent inflation. The Dow Jones Industrial Average dropped 748 points, or 1.7%, marking its worst day so far in 2025. The S&P 500 fell 1.7%, and the Nasdaq Composite slid 2.2%.
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
Consumer sentiment fell to 64.7 in February, a nearly 10% drop from the previous month, as Americans expressed concerns about higher inflation resulting from potential new tariffs. The five-year inflation outlook jumped to 3.5%, the highest level since 1995. Additionally, U.S. home sales fell more than expected to 4.08 million units, and the services purchasing managers’ index showed signs of slowing.
Dow plunges amid economic uncertainty
Investors sought refuge in traditionally safer assets, such as bonds, causing yields to tumble. Defensive sectors, including consumer staples, utilities, and healthcare, outperformed the broader market.
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
Companies like Conagra Brands, Campbell Soup, Mondelez International, and Kraft Heinz saw significant gains as investors looked for safe havors. Prominent investor Steve Cohen shared his outlook at a conference in Miami, stating, “It’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.” Cohen pointed to proposed tariffs and government cost-cutting measures as factors contributing to the market’s uncertainty. Expectations for multiple Federal Reserve rate cuts by December 2025 surged, with trading in 30-day fed funds futures contracts indicating roughly 55% odds for two to three rate cuts, up from 44.4% just a day earlier.
In other news, UnitedHealth Group fell almost 7% after reports surfaced that the U.S. Department of Justice has launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage plans. The market’s sell-off was driven by heightened economic uncertainty and inflation fears, prompting a significant shift into defensive sectors and safer assets as investors brace for potential market-moving headlines from the Trump administration over the weekend.
