Dow tumbles 800 points as inflation and tariff fears mount
CNN
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US stock markets fell sharply Friday after an economic report showed American consumers are growing increasingly fearful of price increases and how President Donald Trump's tariffs could reignite the inflation crisis.
The Dow Jones Industrial Average fell 800 points, or 1.7%. The broader S&P 500 sank 1.6% and the Nasdaq fell 2.1%.
The University of Michigan's latest survey, released Friday, showed that US consumer sentiment declined in February for the second consecutive month, according to a final reading, down by a steep 10% from January. That was double the decline initially reported earlier this month.
The survey found that Americans are losing confidence in the economy, driven primarily by worries over Trump's tariffs potentially jacking up prices.
A new CNN poll released Thursday similarly showed pessimism on the rise because of prices: Nearly two thirds of US adults nationwide, 62%, said they feel Trump isn't doing enough to address inflation. The Michigan survey showed that Americans are now fearful of higher inflation on the horizon.
Investors grew fearful that weak consumer sentiment could lead to a pullback in Americans' shopping habits. Consumer spending makes up more than two-thirds of the US economy.
Although there's no evidence that a recession is anywhere on the horizon, economic data has weakened in recent months. Job growth has fallen off over the course of the past year as employers wait to see what the Trump administration's economic policy will bring, particularly around tariffs, which could severely dent companies' bottom lines. And retail sales have dropped recently, too.
Walmart warned Thursday that its sales and profit growth will slow this year, a surprise to many on Wall Street who bet that Walmart's low prices on essentials would continue to ignite the company's stellar growth over the past several years, even during the worst of the inflation crisis.
Also dragging down stocks was UnitedHealth, a key Dow component, which sank 7% on a Wall Street Journal report that the US Department of Justice is investigating the company for its Medicaid billing practices. The company strongly denied the Journal's report.
Despite the plunge, stocks are very close to their all-time highs. The S&P 500 hit a record on Wednesday before falling back just a bit Thursday.
