Last Updated: 4:06 PM EST
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Stock indices finished today’s trading session in the red after a slew of new economic data. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 2.06%, 1.71%, and 1.69%, respectively.
This happened because the U.S. economy showed signs of slowing down in February. Indeed, the S&P Global Flash U.S. PMI composite index dipped to a 17-month low of 51.6 due to a decline in services output that offset manufacturing growth. This slowdown in business activity is a concern, as it can have a ripple effect on consumer spending and overall economic growth.
As consumers, we’re closely tied to the performance of the businesses that drive our economy. Therefore, it is no surprise that consumer sentiment took a hit in February. The University of Michigan’s Consumer Sentiment Index declined sharply from 71.7 to 64.7 in January. Consumers are increasingly worried about inflation, with year-ahead inflation expectations jumping to 4.3% – the highest reading since November 2023.
One area where consumers are feeling the pinch is in the housing market. Existing home sales declined 4.9% to an adjusted annual rate of 4.08 million in January. Although sales increased 2.0% year-over-year, the median existing-home sales price rose 4.8% to $396,900. This combination of higher prices and stubbornly high mortgage rates is making it tough for buyers to afford homes, and it’s a challenge that’s likely to persist in the coming months.
As the Federal Reserve continues to grapple with inflation and interest rates, U.S. businesses and consumers are growing increasingly cautious. With economic uncertainty on the rise, it remains to be seen how the U.S. economy will perform in the coming months.
First Published: 3:45 AM EST
U.S. futures were little changed early Friday following a downturn in the previous session driven by Walmart’s (WMT) weak earnings forecast. The retail giant’s outlook raised concerns about the economy’s health. Futures on the Nasdaq 100 (NDX) and the S&P 500 (SPX) were down 0.02% and 0.05%, respectively, at 3:39 a.m. EST, February 21, while the Dow Jones Industrial Average (DJIA) futures were up 0.06%.
Thursday’s regular trading session saw the Dow Jones, the S&P 500, and the Nasdaq Composite (NDAQ) fall by over 1%, 0.4%, and 0.5%, respectively.
Walmart stock declined 6.5% despite reporting better-than-expected Q4 results. The stock’s decline also impacted other retail giants like Target (TGT) and Costco (COST). Adding to the negative sentiment, Palantir (PLTR) stock continued to fall over reports of potential Pentagon budget cuts and its CEO’s new stock sale plan.
For the week, the S&P 500 is poised for a small gain, while the Nasdaq Composite is slightly down. The Dow Jones is the weakest performer, currently on track for a loss.
Looking ahead, investors will be closely watching for the latest U.S. Services and Manufacturing Purchasing Managers’ Index (PMI) readings for February month. Also, Existing Home Sales and Consumer Sentiment reports will be released today. These data points will provide further insights into the strength of the economy and may influence future market direction.
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.482%. Simultaneously, WTI crude oil futures are trending lower, hovering near $72.02 per barrel as of the last check.
Elsewhere, European indices opened higher on Friday as investors awaited the UK’s flash Manufacturing and Services PMI reports to gain insights about the economy’s health.
Asia-Pacific Markets Ended Higher on Friday
Asia-Pacific indices were in the green today. Hong Kong’s Hang Seng Index hit a three-year high today, driven by tech giant Alibaba’s (HK:9988) (BABA) stellar earnings report. Also, Chinese stocks rose after U.S. President Donald Trump hinted at the possibility of a new trade deal with China, pointing to a more positive outlook for U.S.-China relations.
Notably, Hong Kong’s Hang Seng Index rallied 3.99%. Further, China’s Shanghai Composite and Shenzhen Component indices gained 0.85% and 1.82%, respectively. Also, Japan’s Nikkei and Topix indices were up 0.26% and 0.07%, respectively.
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