Dow Joins S&P 500 in Correction as Trump Tariff Stock Sell-Off Continues

The Dow Jones Industrial Average became the last of the major stock indexes to confirm a correction on Friday as markets continued to reel from President Donald Trump’s sweeping reciprocal tariffs.

The Dow dropped 3.5% Friday morning, putting it about 13% off its December all-time closing high. Meanwhile, the Nasdaq Composite tumbled roughly 4.5%, putting it in bear market territory.

The Dow had up to this point avoided the fate of the other major indexes—the S&P 500 and Nasdaq Composite—due to its quirky composition. The Dow’s performance is impacted most by the stocks with the highest share prices, which as of Friday were healthcare giant UnitedHealth Group (UNH) and investment bank Goldman Sachs (GS). The S&P and Nasdaq, on the other hand, are capitalization-weighted indexes that are influenced by their most valuable components, primarily mega-cap tech stocks like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). 

The sell-off of Magnificent Seven stocks earlier this year pushed the Nasdaq into a correction in early March, and the S&P 500 followed suit about a week later. The Dow’s comparatively large exposure to defensive sectors like healthcare and consumer staples had kept it out of a correction. But Thursday’s tariff-induced sell-off was broad, dealing the Dow its worst day since June 2020 and pushing the equal-weight S&P 500 into a correction.