US stock markets fell sharply Friday after an economic report showed American consumers are growing increasingly fearful of price increases and how President Donald Trump’s tariffs could reignite the inflation crisis.
The Dow Jones Industrial Average fell 748 points, or 1.7%. The broader S&P 500 also sank 1.7% and the Nasdaq was 2.2% lower. The Dow tumbled for the second consecutive day, falling about 1,200 points over the course of Thursday and Friday.
The University of Michigan’s latest survey, released Friday, showed that US consumer sentiment declined in February for the second consecutive month, according to a final reading, down by a steep 10% from January. That was double the decline initially reported earlier this month.
The survey found that Americans are losing confidence in the economy, driven primarily by worries over Trump’s tariffs potentially jacking up prices.
A new CNN poll released Thursday similarly showed pessimism on the rise because of prices: Nearly two-thirds of US adults nationwide, 62%, said they feel Trump isn’t doing enough to address inflation. The Michigan survey showed Americans are now fearful of higher inflation on the horizon.
Investors grew fearful that weak consumer sentiment could lead to a pullback in Americans’ shopping habits. Consumer spending makes up more than two-thirds of the US economy.
What else to know: Although there’s no evidence that a recession is anywhere on the horizon, economic data has weakened somewhat in several ways recently.
• Job growth has fallen off over the course of the past year as employers wait to see what the Trump administration’s economic policy will bring — particularly around tariffs, which could severely dent companies’ bottom lines.
• Housing continues to slow down: A National Association of Realtors report Friday shows that sales of existing homes fell 4.9% in January from the previous month, while prices shot up to a record high for the month, exacerbating America’s home affordability crisis.
• Retail sales have dropped recently, too.
