Dow Jones: Rebounds 400 Points, But US Indices Face Worst Weekly Drop in Two Years

Despite Friday’s rally, markets remained under pressure. Thursday’s 1.4% drop pushed the S&P 500 into correction territory, now down more than 10% from its recent high. The Nasdaq Composite has lost over 9% year-to-date, while the Russell 2000 is down nearly 18%, approaching bear market levels.

The sell-off has been driven largely by concerns over President Donald Trump’s shifting tariff policies, which have increased market uncertainty over the past three weeks. Deutsche Bank noted that the S&P 500 is set for its worst weekly performance since the Silicon Valley Bank collapse, with losses exceeding 4% this week.

Consumer Confidence and Treasury Yields Add Pressure

Economic data released Friday reinforced investor concerns. The University of Michigan’s Consumer Sentiment Index fell to 57.9, well below the 63.2 estimate, signaling growing economic uncertainty. Rising inflation expectations and a climb in the 10-year Treasury yield further pressured markets.

Portfolio manager Thomas Martin of Globalt Investments noted that despite the rebound, traders remain cautious. “Sentiment is deteriorating, and higher yields could limit upside momentum,” he said.