Wall Street Tumbles as Trump’s Tariff Plans and Economic Worries Trigger Market Sell-Off

U.S. stocks plunged on Friday as weaker economic data and President Trump’s tariff plans rattled markets, with the Dow dropping 749 points. Business activity hit a 17-month low, and rising costs from tariffs fueled inflation concerns. Tech and consumer discretionary stocks suffered heavy losses, while consumer staples provided some support.

CONTENTS:

• US Stock Market Closing Bell: Dow Drops 749 Points, S&P 500 Falls Over 100 Points as Major Stocks Decline
• Wall Street Closes Sharply Lower Amid Economic and Tariff Concerns

Wall Street Tumbles as Trump’s Tariff Plans and Economic Worries Trigger Market Sell-Off

Stocks plunged on Friday as weaker-than-expected economic data raised concerns about the impact of President Donald Trump’s policies on U.S. business activity. The S&P 500 and Dow Jones Industrial Average both dropped 1.7%, marking their worst one-day declines since December 18, 2023, while the Nasdaq fell by 2.2%.

A report from S&P Global indicated that U.S. business activity has slowed to a 17-month low, with the services sector unexpectedly contracting. Many businesses attributed this decline to uncertainty surrounding Trump’s policies, including potential new tariffs and federal spending cuts. According to Chris Williamson, chief business economist at S&P Global Market Intelligence, businesses are reporting weaker sales and rising costs due to tariff-related price increases.

Concerns over inflation added further pressure on markets, as a University of Michigan survey showed consumers bracing for higher costs driven by tariffs. Major retailers, including Walmart, are expected to pass these price hikes onto consumers.

The market downturn follows Trump’s recent tariff announcements, including a 10% levy on Chinese imports and potential 25% tariffs on autos, semiconductors, and pharmaceuticals. Federal budget cuts, led by the newly formed Department of Government Efficiency (DOGE), have also resulted in significant job losses, particularly in scientific and environmental sectors.

Amid economic uncertainty, Treasury yields also saw a sharp decline, with the 10-year yield falling from 4.51% to 4.41%. Analysts suggest that Trump’s policy shifts continue to fuel market volatility and economic instability.

US Stock Market Closing Bell: Dow Drops 749 Points, S&P 500 Falls Over 100 Points as Major Stocks Decline

On February 21, the U.S. stock market experienced a sharp sell-off, with key indices—the Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq Composite—declining between 1.7% and 2.2%. Apart from the consumer staples sector, all major industries ended in the red as investor sentiment was rattled by economic uncertainty and new tariff announcements from President Donald Trump.

Market Performance at the Close

• Dow Jones: Fell 748.6 points (-1.7%) to close at 43,428
• S&P 500: Declined 104.4 points (-1.7%) to 6,013.1
• Nasdaq Composite: Dropped 438.4 points (-2.2%) to 19,524

The market downturn was driven by concerns over weaker-than-expected business activity and fears surrounding Trump’s proposed tariffs on automobiles, semiconductors, and pharmaceuticals.

Sector Performance & Key Stocks

Most sectors saw heavy losses, with consumer discretionary, technology, industrial, and energy stocks taking the biggest hits.

• Top Dow Losers:
  • NVIDIA (-4.1%) closed at $134.4
  • Amazon (-2.8%) ended at $216.6
  • UnitedHealth Group (-7.2%) finished at $466.4
  • American Express (-2.8%) settled at $295.4

• Top Dow Gainers:
  • Coca-Cola (+1.9%) closed at $71.4
  • Merck & Co. (+2.1%) ended at $89.5
  • Procter & Gamble (+1.8%) settled at $170.2

Nasdaq Performance & Key Movers

Tech-heavy Nasdaq saw a broader sell-off, with several major names recording steep declines.

• Biggest Losers:
  • Grail Inc. (-14.7%) at $40.7
  • Old Dominion Freight Line (-8.5%) at $180.4
  • Tesla (-4.7%) at $337.8
  • Intel (-4.7%) at $24.9
  • NVIDIA (-4.1%) at $134.4

• Notable Gainers:
  • MercadoLibre (+7.1%) at $2,260
  • PDD Holdings (+5.6%) at $131.3
  • Mondelez International (+4.0%) at $64.7

Market Outlook

Investor concerns were further heightened by Trump’s statements regarding additional tariffs beyond those previously announced, leading to widespread market uncertainty. While consumer staples provided some support, fears over the economic impact of these trade policies kept selling pressure high.

Wall Street Closes Sharply Lower Amid Economic and Tariff Concerns

Key Highlights:

• Major indexes recorded significant weekly losses.
• Consumer sentiment weakened, and inflation expectations rose.
• UnitedHealth shares dropped amid reports of a DOJ investigation.
• Index performance: Dow down 1.69%, S&P 500 down 1.71%, Nasdaq down 2.20%.

U.S. stock markets extended their decline on Friday, concluding a volatile, holiday-shortened trading week dominated by concerns over economic uncertainty and escalating tariff threats.

All three major U.S. indexes fell sharply following disappointing economic data, with losses intensifying as the trading session progressed. The S&P 500 recorded its largest single-day percentage drop since December 18, while the Russell 2000 also posted a significant decline.

For the week, all three benchmarks posted losses, with the Dow Jones Industrial Average experiencing its most substantial weekly decline since mid-October.

“Seeing this much red on a Friday is concerning,” said Greg Bassuk, CEO of AXS Investments. “Consumer sentiment, tariffs, and corporate earnings have now overtaken AI and technology as the primary market drivers.”

Market Drivers:

Economic reports pointed to slowing U.S. business activity and deteriorating consumer sentiment. Many survey respondents expressed growing concerns about economic uncertainty.

Walmart’s (WMT.N) weaker-than-expected earnings guidance on Thursday added to fears of slowing consumer demand.

According to S&P Global’s chief economist Chris Williamson, U.S. business optimism has “evaporated,” with heightened uncertainty darkening the economic outlook.

Bassuk added, “Uncertainty is the dominant theme for investors right now, fueling the market volatility we’ve witnessed this week. We expect this trend to continue at least through the first quarter.”

Sectors sensitive to economic shifts—transportation, semiconductors, small caps, housing, and consumer discretionary stocks—fell more than 2%.

Tech giants also took a hit, with megacap momentum stocks tumbling 2.9%, while all members of the Magnificent Seven ended the day in negative territory. Nvidia (NVDA.O), set to report earnings next week, dropped 4.1%.

Key Market Figures:

• Dow Jones: -748.63 points (-1.69%) to 43,428.02
• S&P 500: -104.39 points (-1.71%) to 6,013.13
• Nasdaq Composite: -438.36 points (-2.20%) to 19,524.01

Among the 11 major sectors of the S&P 500, all but consumer staples closed lower, with consumer discretionary and technology stocks suffering the worst losses.

Tariffs and Economic Concerns Weigh on Markets

Adding to market jitters, U.S. President Donald Trump announced plans to introduce new tariffs on lumber and forest products, in addition to previously announced duties on imported cars, semiconductors, and pharmaceuticals.

The CBOE Volatility Index (VIX) closed at its highest level since February 3, reflecting growing market unease.

Earnings Season Update

The fourth-quarter earnings season is nearing its conclusion, with 76% of S&P 500 companies that have reported so far beating Wall Street estimates, according to LSEG data.

However, some companies faced significant sell-offs:

• Tesla (TSLA.O) and Rivian (RIVN.O) both fell 4.7% after announcing vehicle recalls.
• UnitedHealth (UNH.N) dropped 7.2% following reports of a DOJ investigation into its Medicare billing practices.
• Block (XYZ.N) tumbled 17.7% after missing fourth-quarter profit expectations.
• Akamai Technologies (AKAM.O) fell 21.7% due to weaker-than-expected 2025 revenue forecasts.

Analysts now expect S&P 500 fourth-quarter earnings growth to reach 15.7% year-on-year, up from the 7.8% projection at the start of January.

Market Breadth & Trading Volume

Declining stocks outnumbered advancing ones on the NYSE by a 2.64-to-1 ratio.

• 102 stocks hit new highs, while 119 stocks reached new lows.

On the Nasdaq, declining stocks outpaced gainers by a 3.04-to-1 ratio, with 67 new highs and 135 new lows.

Overall, U.S. exchange trading volume was 17.06 billion shares, exceeding the 20-day average of 15.30 billion shares.