Dow drops 450 points amid inflation worries and tariff concerns
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US stocks fell on Thursday after Walmart, the world’s largest retailer, cautioned that 2025 could be a turbulent year, projecting slower sales growth amid concerns that consumers are feeling financially stretched.
Walmart’s gloomy outlook weighed heavily on the markets, dragging the Dow down by over 650 points during the session before it closed 451 points lower, a 1.5% drop. The S&P 500 and Nasdaq Composite also declined, slipping 0.43% and 0.47% respectively. Walmart shares ended the day down 6.5%. The sell-off reflects growing investor anxiety over weakening consumer spending, a key driver of the US economy.
“We’re navigating uncertainties around consumer behavior and global economic and geopolitical conditions,” said Walmart CFO John David Rainey.
Rising inflation and prolonged high interest rates continue to strain American shoppers, and the economic landscape could grow more complex if President Donald Trump follows through on his tariff plans.
In his first month back in office, Trump imposed a 10% blanket tariff on Chinese imports and a 25% tariff on all steel and aluminum imports. He also announced plans to introduce tariffs on goods from Mexico and Canada starting in March and directed his administration to consider “reciprocal tariffs” on all trade partners.
While Walmart’s massive scale offers some protection against rising costs and tariff pressures, its cautious forecast signals potential challenges ahead for smaller retailers and the broader retail sector in 2025.
Adding to concerns, US retail sales plunged 0.9% last month, a sharper drop than economists expected, reflecting widespread consumer cutbacks. Meanwhile, consumer inflation expectations surged to their highest level since November 2023, according to the University of Michigan’s latest survey, while overall consumer sentiment took a notable hit.
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