The decline was influenced by reports showing slowing U.S. business activity, weaker consumer sentiment, and rising inflation expectations. Specifically, a preliminary report from S&P Global indicated that U.S. business activity is nearing stall-speed, and a University of Michigan survey showed consumers are expecting higher inflation due to potential tariffs.

Major companies across various sectors experienced significant losses. For example, Akamai Technologies fell by 20.9%, Nvidia dropped by 3.3%, and United Airlines lost 6.2%. However, some companies like Celsius Holdings saw gains due to strategic acquisitions.

Rising inflation expectations, partly due to potential tariffs, contributed to the stock market decline. Consumers are now expecting prices to be 4.3% higher in the next 12 months, up from 3.3% previously, which could limit the Federal Reserve's ability to lower interest rates.

Smaller companies, as represented by the Russell 2000 index, experienced a more significant decline, dropping by 2.9%. This indicates that smaller companies are more vulnerable to economic uncertainties and policy changes.