The U.S. New York Stock Exchange closed sharply lower on the 21st (local time) due to concerns about economic slowdown and inflation.
On that day, the Dow Jones Industrial Average closed at 43,428.02, down 1.69% from the previous trading day. The Standard and Poor's (S&P) 500 index finished at 6,013.13, a drop of 1.71% from the previous session, while the technology-heavy Nasdaq index closed at 19,524.01, plunging 2.20%.
The U.S. consumer sentiment dropped, and rising inflation expectations impacted the sharp decline that day. According to the University of Michigan, the final consumer sentiment index for February was recorded at 64.7, down 7 points from January's 71.7. This figure fell short of the previously released market expectation of 67.8.
Inflation expectations also surged sharply. The final '1-year expected inflation' for February was recorded at 4.3%, an increase of 1.0 percentage point from the previous month's 3.3%. The 5-year long-term expected inflation also rose to 3.5%, up 0.3 percentage points from the previous month. This is the highest level since 1995.
Inflation uncertainty soared as well. The 1-year uncertainty rose from 7.6 percentage points to 9.5 percentage points, while the 5-10 year uncertainty increased from 6 percentage points to 8.2 percentage points. The preliminary Purchasing Managers' Index (PMI) for U.S. services sector in February showed a reading of 49.7, indicating that the services sector is expected to contract for the first time in 25 months.
On that day, the massive tech companies 'Magnificent (M) 7' also showed a declining trend on the New York Stock Exchange. Tesla fell by over 4%, while Amazon and Alphabet recorded declines in the 2% range. Microsoft and Meta also closed down in the 1% range.