Investor sentiment drove a sharp decline in American stock markets on Friday as economic data painted an increasingly gloomy picture. The Dow Jones Industrial Average dropped 748 points, or 1.7%, while the broader S&P 500 fell by 1.7% and the Nasdaq slid 2.2%. This marked the second consecutive day of declines for the Dow, which plummetted about 1,200 points over Thursday and Friday.

The latest economic indicators, including the University of Michigan’s survey, revealed that American consumer sentiment has declined for the second consecutive month, with a steep 10% decline in February. This drop, according to a final reading, was double the initial decline reported earlier in February. In the University of Michigans latest survey released Friday, It showed that US consumer sentiment declined in February for the second consecutive month, down by a steep 10% from January. That was double the decline initially reported earlier this month.

Americans are increasingly concerned about the economic outlook, particularly due to rising inflation and President Donald Trump’s tariffs. The survey explicitly citing a worsening of consumer sentiment due to inflation fears. The survey found that “Americans are losing confidence in the economy, driven primarily by worries over Trump’s tariffs potentially jacking up prices.

Nearly two-thirds of US adults nationwide, 62%, said they feel Trump isn’t doing enough to address inflation.

A recent CNN poll highlighted similar sentiments, with a significant portion of the population expressing pessimism about the economic future. This trend, coupled with faltering job growth and slowed retail sales, has raised concerns among economists and investors alike. Job growth has slowed over the past year, while employers await clearer economic policies, especially around tariffs. Evidence was found in a report by the National Association of Realtors, which stated that sales of existing homes dropped 4.9% in January, while prices soared to a record high, exacerbating America’s housing affordability crisis. Also, Retail sales have been decreasing recently too.

UnitedHealth, a key component of the Dow, also contributed to the market fall, decreasing 7% after a Wall Street Journal reported the Justice Department is investigating it for Medicaid billing practices. In contradiction to this report, the company is actively denying the allegations. Additionally, recent economic data has painted a picture of slowing growth and rising inflationary pressures. Retail giants like Walmart, have warned of slower sales and profit growth, further complicating an uncertain economic landscape

Consumer fears over rising prices and that Walmart blames tariffs for this was

Despite the current downturn, some experts remain optimistic, pointing to the close proximity of stocks to their all-time highs. For instance, the S&P 500 reached a new record on Wednesday before retreating slightly on Thursday. This gives investors some hope that the market may stabilize soon.