A trio of economic data points doomed stocks to their worst day of 2025

US stocks sold off on Friday in their worst day of 2025, just two days after the S&P 500 closed at a record high.

The Dow Jones Industrial Average shed more than 700 points and lost about 1,000 points since Wednesday’s close.

The decline on Friday accelerated following a trio of economic data releases early in the trading session, which painted a worrying picture about the current state of the economy, consumers, and inflation.

The dynamics added to investors’ fears of higher interest rates, compounding the Federal Reserve’s continued messaging that it is in no rush to cut interest rates until inflation moves lower.

On the economy front, the S&P flash U.S. services PMI dropped to 49.7 in February, well below consensus estimates of 52.9 and below December’s reading of 52.8.

Consumer sentiment plunged in February for the second consecutive month, as measured by the University of Michigan’s survey. Fears of tariffs from the Trump administration and expectations for a rebound in inflation sent the index to 64.7 in February, its lowest level since November 2023.

Finally, existing home sales in January declined to 4.08 million, well below analyst estimates of 4.29 million.

“This morning’s data, furthermore, featured the first contraction in services activity in over two years, a significant development considering that the pivotal area comprises roughly 70% of the US economy,”

“Existing home sales offered little hope for a real estate recovery as elevated financing charges and costly properties are hampering affordability for prospective buyers. Households are also feeling pressured by the vast uncertainty ahead, as illustrated by UMich’s downward revision to consumer sentiment in light of worsening current conditions, dampened expectations for the future, and loftier long-term inflation projections,” Torres added.

Also weighing on stocks was a second-straight day of losses for Walmart shares after the retail giant issued a warning about profitability this year in its latest earnings.

Meanwhile, UnitedHealth Group stock fell 7% on news the Department of Justice was investigating Medicare billing practices.

Tech stalwart Nvidia lost 4%, and Palantir extended this week’s losses, shedding another 4% in Friday’s session.

Here’s where US indexes stood at the 4:00 p.m. closing bell on Friday:

• S&P 500: 6,013.13, down 1.71%
• Dow Jones Industrial Average: 43,428.02, down 1.69% (-748.63 points)
• Nasdaq composite: 19,524.01, down 2.2%