Based on available information and sentiment from various sources, the stock market fell today, February 21, 2025, due to a combination of factors that heightened investor uncertainty and prompted a broad pullback. One key trigger was Walmart's disappointing earnings forecast, which raised concerns about consumer spending and the broader economy's health. As the world's largest retailer and a bellwether for consumer behavior, Walmart's cautious guidance—despite beating earnings estimates—highlighted uncertainties around consumer sentiment and economic conditions, leading its stock to drop 6.5% and dragging down other retail stocks like Target and Costco. This contributed to a 1% decline in the Dow Jones Industrial Average, a 0.4% drop in the S&P 500, and a 0.5% slide in the Nasdaq.
Additionally, renewed worries about U.S. tariffs, particularly President Trump's proposed 25% tariffs on imports from Mexico and Canada (delayed for a month) and 10% tariffs on Chinese goods, fueled market jitters. These trade policies raised fears of potential cost increases for businesses and consumers, as well as the risk of a broader trade war, which had been weighing on markets in recent sessions. Posts on X also pointed to a cooling economy, with some users citing an unexpected contraction in the PMI index and rising inflation expectations (e.g., the University of Michigan's 5-year inflation outlook hitting a high), suggesting stagflationary pressures—a combination of slowing growth and persistent inflation—that could unnerve investors.
Together, these factors—Walmart’s weak outlook, tariff-related uncertainty, and broader economic concerns—shifted investor sentiment, leading to a sell-off after two days of record highs for the S&P 500. While no single event caused the drop, the convergence of these issues likely prompted traders to reassess risk, resulting in the market's decline.
