Dow Dips Over 400 Points Following Tariffs Threat: Investor Sentiment Declines, Greed Index In 'Fear' Zone

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index remained in the “Fear” zone on Friday.

U.S. stocks settled lower on Friday, with the Dow Jones index dipping more than 400 points as investors digested the jobs report for January.

Wall Street also recorded losses last week as renewed fears over inflation and trade tariffs eroded risk appetite. Investor uncertainty grew following President Donald Trump’s announcement that ‘reciprocal tariffs' would take effect next week.

The University of Michigan’s consumer sentiment survey revealed an “unusually large” spike in inflation expectations. The one-year inflation outlook surged by a full percentage point to 4.3%, marking its highest level since November 2023.

On the macro front, February's jobs report revealed a mixed outcome, with employment growth slowing down more than expected, yet unemployment fell more than expected, and wages surged more than expected.

Amazon.com Inc. AMZN reported better-than-expected earnings and sales results for its fourth quarter after the market close Thursday. However, the company said it sees first-quarter net sales to come in a range of $151 billion to $155.5 billion, up 5% to 9% year-over-year, down from market estimates of $158.5 billion.

All sectors on the S&P 500 closed on a negative note, with communication services, consumer discretionary, and materials stocks recording losses on Friday.

The Dow Jones closed lower by over 444 points to 44,303.40 on Friday. The S&P 500 fell 0.95% to 6,025.99, while the Nasdaq Composite dipped 1.36% at 19,523.40 during Friday's session.

Investors are awaiting earnings results from McDonald’s Corporation MCD, ON Semiconductor Corporation ON, and Rockwell Automation, Inc. ROK today.

What is CNN Business Fear & Greed Index?

At a current reading of 39.3, the index remained in the “Fear” zone on Friday, versus a prior reading of 44.3.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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