Wall Street saw a dramatic selloff on Friday as the Dow Jones Industrial Average plummeted 748 points, marking its steepest decline of 2025 so far. The drop came as new economic data and proposed Trump administration tariffs rattled investor confidence.
The S&P 500 fell 1.7% while the tech-heavy Nasdaq Composite tumbled more than 2%, with losses accelerating into the closing bell. Traders rushed to dump stocks ahead of the weekend, fearing potential new policy announcements from the Trump administration.
Fresh economic reports painted a concerning picture of the U.S. economy. The University of Michigan's consumer sentiment index dropped sharply to 64.7 in January, with consumers expressing worry about inflation risks from possible new tariffs. The survey showed five-year inflation expectations hitting 3.5% - the highest level since 1995.
Adding to market anxiety, existing home sales fell more than anticipated to 4.08 million units, while the U.S. services sector unexpectedly contracted in February according to S&P Global data.
Major companies felt the impact, with retail giant Walmart extending losses for a second day after issuing disappointing guidance. Popular tech names like Nvidia and Palantir saw steep declines as investors rotated into traditionally defensive sectors.
"Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs," said Chris Williamson, chief economist at S&P Global Market Intelligence.
The market rout wiped out earlier gains, leaving the major indexes deeply in the red for the week. The Dow and Nasdaq each shed roughly 2.5%, while the S&P 500 declined 1.6%.
Investors sought refuge in consumer staples and utilities, with companies like Procter & Gamble, General Mills and Kraft Heinz bucking the downward trend. The shift highlighted growing worries about economic growth as the impact of proposed trade policies remains uncertain.