The S&P 500 fell 1.7 percent on Friday, wiping out nearly all its gains since President Trump’s inauguration last month, due to mounting fears over stubborn inflation. A widely watched measure of consumer sentiment showed a significant drop in consumers’ confidence about the economy.
The Nasdaq Composite also fell, with tech stocks suffering from the decline. Consumers expect prices for goods and services to rise at an annual rate of 3.5 percent over the next five to 10 years, a level not seen since 1995. High interest rates and inflation concerns have raised fears about the ability of consumers to drive economic growth.
The Trump administration’s policies, particularly those targeting tariffs on U.S. trading partners and immigration deportations, have fueled inflation concerns. High interest rates weigh on the stock market, and the prospect of “stagflation” – a combination of slowing economic growth and rising prices – has investors uncertain about company valuations and future performance.
Investors were already jittery due to corporate earnings reports, including Walmart’s slower growth amid U.S. tariff uncertainty. The large expiration of derivatives contracts may have exacerbated Friday’s sell-off.
Source: https://www.nytimes.com/2025/02/21/business/stock-market-declines-trump.html