US Stocks Sell Off amid Recession Fears
Traders at the New York Stock Exchange witnessed a sharp sell-off on Friday as US economic data stoked investor concerns over a slowing economy and persistent inflation.
The Dow Jones Industrial Average plummeted 748 points (1.7%), extending its two-day losses to over 1,200 points. The S&P 500 lost 1.7%, falling for a second consecutive day after setting a record high on Wednesday. The Nasdaq Composite shed over 2%.
Economic indicators heightened concerns, including:
* Michigan consumer sentiment index dropped 10% in January, reflecting pessimism about future inflation due to potential tariffs.
* Five-year inflation expectations reached 3.5% in the survey, the highest since 1995.
* Existing home sales fell unexpectedly to 4.08 million units last month.
* US services purchasing managers index contracted in February.
Walmart's weak earnings forecast further soured the outlook, weighing on consumer and economic sentiment.
Prominent investor Steve Cohen warned of a potential "significant correction" due to tariff proposals and government cost-cutting measures.
Investors sought refuge in defensive sectors, leading to gains in Procter & Gamble, General Mills, and Kraft Heinz. For the week, the S&P 500 declined 1.6%, while the Dow and Nasdaq fell 2.5% and 2.4%, respectively.
"Top performers in the S&P 500 today are from defensive sectors like consumer staples, utilities, and healthcare," said Larry Tentarelli of the Blue Chip Daily Trend Report. "Investors typically rotate into these sectors during concerns about economic growth."