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Dow Jones Plunges 700 Points Amid Consumer Sentiment Decline and Inflation Fears
U.S. stock market experienced a significant downturn on Friday as the Dow Jones Industrial Average lost over 700 points, driven by rising inflation concerns and a sharp decline in consumer confidence. According to the University of Michigan Consumer Sentiment Survey, confidence dropped to 64.7 in January, marking a 10% decline—a sharper fall than expected—highlighting growing fears of inflation.
Market Performance: Major Indexes See Steep Declines
- The Dow Jones Industrial Average fell 726 points, or 1.8%.
- The S&P 500 Index declined by 1.1%.
- The Nasdaq Composite dropped 1.6%.
This sell-off followed a 450-point drop in the Dow Jones during the previous session, while the S&P 500 lost 0.4%, and the Nasdaq Composite retreated 0.5% after pulling back from its all-time highs.
Inflation Fears and DOJ Investigation Weigh on Markets
- Five-year inflation expectations rose to 3.5%, the highest level since 1995.
- UnitedHealth stock plunged more than 10% following a Wall Street Journal report indicating that the U.S. Department of Justice (DOJ) is investigating the company.
- Walmart stock dropped 6.5%, and Palantir Technologies also saw significant declines, contributing to broader market weakness.
Technology and Cybersecurity Stocks Also Under Pressure
- Cloud software stocks fell more than 14% after mixed quarterly earnings results.
- CrowdStrike, a leading cybersecurity stock, declined 2.84%, despite Barclays raising its price target from $372 to $506 ahead of the company’s earnings report on March 4.
Weekly Market Performance: A Tough Week for Wall Street
By the end of the week, U.S. stock indexes posted notable losses:
- The S&P 500 Index dropped approximately 1%.
- The Dow Jones declined by 2%.
- The Nasdaq Composite lost 1.6%.
Outlook: Will the Market Continue to Face Pressure?
Investors are closely watching inflation trends, corporate earnings, and the Federal Reserve’s monetary policy to determine the market’s next direction. Ongoing selling pressure may lead to further market declines, especially if inflation fears continue to weigh on consumer sentiment and investor confidence.
