Why Did the Stock Market Crash on Friday?

Feb 21st, 2025

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📉 What Happened to the Stock Market on Feb 21st, 2025?

On Friday, February 21, 2025, the S&P 500 sank 1.7%, the Dow Jones Industrial Average dropped 781 points (1.8%), and the Nasdaq plunged 2.2% in a massive selloff. This was the worst market drop in two months, leaving many investors wondering: Why did the stock market crash?

🛑 Top 3 Reasons for the Market Crash on Feb 21, 2025

🔻 1. Weak Economic Data & Slowing Growth

  • Business activity fell to a 17-month low, raising concerns about a potential recession.

  • Consumer sentiment dropped to a 15-month low, reflecting fears about the economy.

  • Home sales fell short of expectations due to high mortgage rates and expensive housing.

🔻 2. Political & Inflation Concerns

  • President Trump’s policies, tariffs, and spending cuts spooked businesses and consumers.

  • Inflation expectations jumped from 3.3% to 4.3%, driven by potential tariffs raising prices.

  • Investors fear the Federal Reserve may keep interest rates high to fight inflation.

🔻 3. Corporate Earnings Disappointments

  • Walmart (-2.5%) and Akamai Technologies (-20.9%) issued weak financial outlooks.

  • Even big tech stocks like Nvidia (-3.3%) and United Airlines (-6.2%) suffered heavy losses.

  • The Russell 2000 index fell 2.9%, showing that smaller companies took a bigger hit.

📊 Should You Be Worried About the Market Crash?

Despite Friday’s selloff, the stock market is still up for 2025 and near all-time highs. Historically, market pullbacks create buying opportunities rather than long-term disasters.

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