US stocks tumbled on Friday (Feb 21), extending their sell-off in the wake of dour economic reports and closing the book on a holiday-shortened week fraught with new tariff threats and worries of softening consumer demand.
All three major US stock indexes moved decisively lower on the heels of the data, and continued their slide into afternoon trading. All three also posted steep weekly losses.
“I don’t like all this red on a Friday,” said Greg Bassuk, chief executive officer at AXS Investments in New York. “We’re seeing consumer sentiment, tariffs and corporate earnings having leap-frogged AI and technology as the primary drivers of market direction.”
Economic data showed US business activity decelerating and consumer sentiment deteriorating, with survey participants expressing an increasingly gloomy outlook in the face of economic unknowns.
The data comes on the heels of Walmart’s disappointing guidance on Thursday, which sparked fears of dampening consumer demand.
US businesses’ optimism has “evaporated,” according to PMI commentary provided by S&P Global’s chief economist Chris Williamson, amid “a darkening picture of heightened uncertainty.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“Uncertainty is the new investor narrative,” Bassuk added. “It’s sparking the volatility that we’ve seen this week.”
“We’re anticipating that the uncertainty and the volatility is going to remain at least through the end of this first quarter.”
Economically sensitive sectors, such as Dow Transports , chips, smallcaps, housing, and consumer discretionary slid more than 2 per cent.
The CBOE volatility index touched its highest level since Feb 4.
This week, US President Donald Trump said he will soon announce new tariffs covering lumber and forest products, in addition to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.
According to preliminary data, the S&P 500 lost 104.01 points, or 1.7 per cent, to end at 6,013.46 points, while the Nasdaq Composite lost 434.97 points, or 2.2 per cent, to 19,524.01. The Dow Jones Industrial Average fell 751.33 points, or 1.7 per cent, to 43,428.02.
Fourth-quarter earnings season is in its final stretch. Some 425 of the companies in the S&P 500 have reported, with 76 per cent of them beating Wall Street expectations, according to LSEG.
Analysts now see aggregate fourth-quarter S&P 500 earnings growth of 15.7 per cent year-on-year, a significant improvement over the 7.8 per cent annual growth prediction as on Jan 1, per LSEG.
Shares of United Health tumbled following a Wall Street Journal report that the Department of Justice has launched an investigation into the health insurer’s Medicare billing practices.
Block slid after the payment firm’s fourth-quarter profit fell short of estimates.
Akamai Technologies dropped as the cybersecurity company forecast annual 2025 revenue below estimates.
Electric vehicle makers Tesla, Rivian both lost ground after they both announced recalls. REUTERS
