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
The US stock market experienced a sharp decline on Friday, with the Dow Jones Industrial Average falling nearly 750 points, or 1.7%. The S&P 500 and Nasdaq composite also saw significant losses, dropping 1.7% and 2.2%, respectively. Reports suggest that concerns over President Donald Trump’s policies, particularly tariffs, are impacting business optimism and economic activity.
Stock Market LIVE: Sensex crashes 750 points, Nifty below 22600; IT index down 2.5% https://t.co/UGlBqP1G85
— ET NOW (@ETNOWlive) February 24, 2025
A survey by S&P Global indicated that US services businesses are facing unexpected declines, with respondents citing worries about federal government policies, including spending cuts, tariffs, and geopolitical developments. Chris Williamson, chief business economist at S&P Global Market Intelligence, stated, “Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments. Sales are reportedly being hit by the uncertainty caused by the changing political landscape, and prices are rising amid tariff-related price hikes from suppliers.”
Stock Market Crash Today: Monday Mayhem! Sensex, Nifty 50 down 1% each – Key reasons behind fallhttps://t.co/jBjzOjXpUH
— ET NOW (@ETNOWlive) February 24, 2025
Consumers are also bracing for higher inflation, partly due to potential tariffs that could drive up prices for various imports.
The University of Michigan survey revealed that consumers expect prices to rise 4.3% over the next 12 months, a significant increase from the 3.3% forecast last month. Additionally, a separate economic report showed weaker-than-expected sales of previously occupied homes last month, as the housing market continues to be affected by high mortgage rates and prices. Despite the recent downturn, the US stock market remains up for the year and is not far from its all-time high set earlier in the week.
Dow Jones plunges on tariff fears
However, the latest reports raise concerns about the economy’s resilience. Small-cap stocks, which are often more sensitive to US economic conditions, experienced substantial losses, with the Russell 2000 index dropping 2.9%.
Nearly 80% of stocks in the S&P 500 fell, including significant losses in Big Tech, airlines, and metal companies. Akamai Technologies saw the sharpest decline in the S&P 500, losing 20.9% despite reporting stronger-than-expected quarterly profits, as investors focused on its disappointing financial performance forecasts for the upcoming year. On the other hand, Celsius Holdings gained 28.4% after announcing its acquisition of Alani Nu, a beverage company targeting female consumers, for $1.65 billion.
Analysts predict the purchase will quickly boost profits for Celsius. Treasury yields dropped following the economic reports, with the yield on the 10-year Treasury falling to 4.41% from 4.51% the previous day. Minutes from the Fed’s last policy meeting revealed that officials might pause further rate cuts due to worries about inflation potentially driven by Trump’s proposed tariffs and other policies.
While lower interest rates can stimulate economic growth, they also risk increasing inflation. Stock markets abroad showed mixed results, with European indexes varying and Asian markets, such as Japan’s Nikkei 225 and Hong Kong’s Hang Seng, seeing gains.
