Wall Street ended the week on a sour note as fresh economic data fueled concerns over slowing growth and persistent inflation, triggering a selloff in stocks.
The Dow Jones Industrial Average tumbled 748.63 points (1.69%) to 43,428.02, marking its worst session of 2025 so far. Over two days, the index shed nearly 1,200 points as investors sought safer ground.
The S&P 500 dropped 1.71% to 6,013.13, while the Nasdaq Composite suffered the steepest loss, plunging 2.2% to 19,524.01.
Market jitters intensified as traders hesitated to hold positions into the weekend, wary of potential policy shifts from the Trump administration, which has proposed new tariffs and cost-cutting measures since taking office a month ago.
Data Sparks Flight to Safety
A batch of economic reports deepened investor unease. The University of Michigan consumer sentiment index slid to 64.7, a nearly 10% decline, as inflation expectations climbed.
The survey’s five-year inflation outlook hit 3.5%, the highest since 1995, with concerns rising over the potential impact of proposed tariffs.
Meanwhile, existing home sales fell more than expected to 4.08 million units, and the U.S. services purchasing managers’ index (PMI) slipped into contraction, according to S&P Global.
As recession fears mounted, investors flocked to bonds, pushing yields lower. Defensive sectors, such as consumer staples, utilities, and healthcare, emerged as the session’s bright spots.
Market Heavyweights Take a Hit
Retail giant Walmart fell 2.5%, marking its second straight session of losses after issuing a weaker-than-expected forecast.
The report dampened confidence in consumer spending, a key driver of economic momentum.
Investor favorites Nvidia and Palantir saw significant declines, as traders moved away from high-growth stocks.
In contrast, Procter & Gamble (+1.8%), General Mills (+3%), and Kraft Heinz (+3%) gained traction, benefiting from the shift toward defensive plays.
Billionaire investor Steve Cohen expressed caution at a Miami conference, saying he believes “the best gains have been had” and that a “significant correction” would not be surprising.
He pointed to the administration’s tariff strategy and cost-cutting efforts as key risks to the business landscape and broader economy.
Defensive Stocks Dominate
For the week, the S&P 500 lost 1.7%, while the Dow and Nasdaq both fell 2.5%. Defensive stocks led Friday’s gains, underscoring the market’s retreat into safer assets.
“The top 20 performers in the S&P 500 today are all from defensive sectors: consumer staples, utilities, and healthcare,” said Larry Tentarelli, founder of Blue Chip Daily Trend Report.
“Investors often rotate into these so-called defensive sectors when economic growth concerns appear.”
With markets on edge, all eyes are on the week ahead—where new policy developments and economic data could either fuel another wave of volatility or provide a much-needed sense of stability.
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