US Stock Market Shaken Again by Growth Slowdown Warnings and Policy Risks

On the 20th (local time), New York’s stock markets closed lower as signs of slowing growth coincided with policy uncertainty. The Dow Jones Industrial Average fell about 0.5% to 49,395, the S&P 500 slipped 0.2% to 6,861, and the Nasdaq Composite dropped 0.3% to 22,682. Rising Treasury yields weighed on growth and financial stocks.

What held the market back were weaker-than-expected GDP figures and a sharply deteriorating trade balance. Fourth-quarter growth came in at just 1.4%, well below the 2.5% forecast, while December’s trade deficit widened to about $70.3 billion, stoking worries about sluggish global demand. Minutes from the recent Federal Reserve meeting also hinted at a delay in rate cuts, spurring higher long-term yields and prompting valuation adjustments.

Policy risks compounded these concerns. Although the Supreme Court blocked certain tariffs—providing relief to affected importers—President Trump’s threat of a new 10% global tariff increased uncertainty around trade. At the same time, in the private credit market, Blue Owl’s suspension of redemptions in specific funds sent shares of alternative-asset managers such as Blackstone and Apollo tumbling roughly 5%, putting pressure on the broader financial sector.

By individual stocks, Walmart fell after issuing conservative guidance amid consumer-spending worries, while Deere rallied more than 10%—boosted by stronger-than-expected results and an upward revision to its profit outlook—supporting sentiment in industrials. Energy shares advanced on a surge in oil prices following heightened U.S.-Iran tensions, though investors remain wary of potential cost pressures ahead. Market participants are now looking to next week’s key inflation data, including the Personal Consumption Expenditures price index, Treasury-yield trends, and any further comments on tariffs as catalysts for the next directional move.