Stocks sold off on Friday as fresh U.S. data fueled investor concerns about a slowing economy and high inflation, sending them seeking safer assets.

The losses deepened as traders worried about a weekend that could bring another barrage of headlines from the Trump administration, which has proposed a series of tariffs and other market-moving policy changes since taking office a month ago.

The Dow Jones Industrial Average fell 724 points, or 1.6%, bringing its two-day loss to more than 1,200 points. Friday's loss was its biggest of the year. The S&P 500 traded 1.6% lower, falling for a second day after closing at a record on Wednesday. The Nasdaq Composite fell more than 2%.

A slew of economic data raised fresh concerns about the economy and sent investors into bonds, sending yields tumbling. The University of Michigan's consumer sentiment index fell to 64.7 in January, a 10% drop and a sharper decline than expected as consumers voiced concerns about higher inflation from possible new tariffs. The survey's five-year inflation outlook was 3.5%, the highest since 1995. Additionally, U.S. existing home sales fell more than expected last month to 4.08 million units. The U.S. services purchasing managers' index also fell into contraction territory for February, according to S&P Global.

Walmart shares fell for a second day after the company issued a weaker-than-expected forecast that also soured the outlook for consumers and the economy.

Prominent investor Steve Cohen offered some negative comments on the market and economy from a conference in Miami.

"This is clearly a period where I think the best gains have been made and [I] wouldn't be surprised to see a significant correction," Cohen said, citing proposed tariffs that are dragging on the economy, as well as some government cost-cutting efforts.

Investor favorites such as Nvidia and Palantir suffered sharp losses Friday as they moved into traditionally safer assets. Procter & Gamble rose more than 1%, while General Mills and Kraft Heinz each gained more than 2%.

For the week, the S&P 500 is down about 1.6%, while the Dow and Nasdaq are down 2.5% and 2.4%, respectively.

"The top 20 performers in the S&P 500 today are all from defensive sectors: consumer staples, utilities and health care," said Larry Tentarelli, chief technical strategist and founder of the Blue Chip Daily Trend Report. "Investors often turn to these so-called defensive sectors when economic growth concerns arise." (Newsmaker23)

Source: CNBC