February 22, 2025
Rising Uncertainty
As a result of the crash, the Dow lost 748.63 points (1.69%), the S&P 500 dropped 1.71%, and the Nasdaq fell 2.2%. Investor anxiety grew worse over potential tariffs, as President Trump repeatedly threatened to impose 25% duties on cars, semiconductors, and pharmaceuticals.
Meanwhile, the housing market faltered, with existing home sales down 4.9%, and the U.S. services sector shrank at its fastest pace in over two years. “Uncertainty is rising, and inflation remains a serious issue,” said Chris Williamson of S&P Global.
More Rate Cuts Incoming
Tech stocks, including Nvidia and Meta, were hit hard, while defensive stocks like Procter & Gamble saw gains. Walmart dropped 2.5% after warning of a weaker consumer outlook. The S&P 500 fell 1.7% for the week, with the Dow and Nasdaq down 2.5%.
The Federal Reserve is now in focus, with traders predicting a 55% chance of interest rate cuts by the end of 2025. Friday’s market volatility was also driven by options expirations, with 80% of S&P 500 stocks closing lower. “Markets are waking up to the consumer impact of tariffs,” said Jamie Cox, managing partner at Harris Financial Group.
