'Concerns Over Economic Slowdown' Lead to Sharp Decline in New York Stock Market... Dow Records Largest Drop This Year

Dow -1.69%, S&P 500 -1.71%, Nasdaq -2.20%
Consumer Sentiment Index Falls to 64.7... Lowest Since November 2023

Major indices on the U.S. New York Stock Exchange fell together on the 21st (local time) amid investor concerns over economic slowdown and persistent inflation.

Wall Street sign. Photo by Yonhap News

On the day, the Dow Jones Industrial Average closed at 43,428.02, down 748.63 points (-1.69%) from the previous session. This was the largest drop so far this year.

The Standard & Poor's (S&P) 500 index closed at 6,013.13, down 104.39 points (-1.71%) from the previous session, while the tech-heavy Nasdaq index ended the day at 19,524.01, down 438.36 points (-2.20%).

Major U.S. media outlets such as the Associated Press and CNBC noted that a series of pessimistic indicators released that day triggered new fears about the economic outlook, dampening investor sentiment.

According to S&P Global, the U.S. services Purchasing Managers' Index (PMI) for February was 49.7, contracting for the first time in 25 months since January 2023. Chris Williamson, Chief Economist at S&P Global Market Intelligence, emphasized, "Companies are broadly worried about the impact of U.S. federal government policies, ranging from spending cuts to tariff impositions and geopolitical situations," adding, "Sales are being hit due to uncertainty caused by changes in the political environment."

The University of Michigan's consumer sentiment index for February was also recorded at 64.7, nearly 10% lower than the previous month, marking the lowest level since November 2023.

This indicates that U.S. consumers are preparing for price increases due to potential tariff impacts, with the University of Michigan explaining that prices are expected to rise to around 4.3% in 12 months. This is a 1 percentage point increase from last month's forecast of 3.3%.

The stock price decline due to disappointing earnings forecasts from Walmart, the largest U.S. retailer, continued on the day (-2.5%). Nvidia (-4.05%) and Broadcom (-3.56%) also contributed to the sharp drop in the indices.