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Shares on Wall Street fell Tuesday after a sluggish round of data on consumer confidence deepened investors’ frustrating concerns that Donald Trump’s tariffs would beat the world’s largest economy.
The Blue Chip Index 500 fell 0.1%, with high-tech Nasdaq composites in New York afternoon trading down 0.8% – as Sharper sales fell earlier in the day.
U.S. stocks rose sharply after Trump’s election in November, hoping he could develop pro-business economic policies and push the S&P 500 to a recent record record.
But a series of disappointing reports, from consumer sentiment to household sales, sent a S&P 500 S&P 500 S&P 500 S&P 500 Slide over the past four days.
The measure of consumer confidence, which the conference committee closely watched, dropped by 7 points from February to 98.3, the biggest drop since August 2021, far more than Wall Street expected of 102.5.
Since June 2024, the short-term outlook for the economy has been lower than the threshold that usually marks a recession.
Meanwhile, the report shows that the average 12-month inflation forecast soared from 5.2% to 6%.
“This increase may reflect a range of factors, including sticky inflation, and the recent price and tariff expectations for major household staples such as eggs,” said Stephanie Guichard, senior economist at the conference committee. Influence.”
Guichard added: “Trade and tariff mentions have increased dramatically. . Most notably, comments about the current government and its policies have dominated the response.”
JPMorgan economist Abiel Reinhart responded to this sentiment, saying: “It seems that political headlines are starting to cause a drop in sentiment.”
Charlie McElligott, a derivatives strategist at Nomura, said investors are “increasingly uncomfortable” with the growing negative economic data and the potential growth of the U.S. unpredictable tariff announcements.
He added that Nomura customers have increased their purchases of derivatives in recent days, called options, which will become valuable if the S&P 500 drops sharply.
Defensive stocks, including beverage maker Dr. Pepper and toothpaste maker Colgate-Palmolive, rose more than 2% on Tuesday as investors moved to the market’s pockets and generally performed better as the economy cooled down. Real estate stocks that benefit from lower interest rates also rallied.
U.S. government debt tends to rise in the face of growing markets, with prices falling, and lowering yields. The 10-year fiscal yield fell 0.1 percentage point to 4.29%, the lowest level since mid-December.
Technology stocks have performed well in recent years during economic boom. Peter Thiel’s data analytics company Palantir fell 3.2%, Tesla fell 8.4%, and digital advertising group Applovin lost 5.9%.
“The US rotation looks defensive,” said Andrew Lapthorne of Société Générale.
Economic figures and concerns about Trump’s tariff plan also dropped oil prices to two months on Tuesday.
Brent crude, the global benchmark, fell 2.2% to $73.17 a barrel, while the Westex Intermediate, marked by the U.S., fell 2.3% to $69.11.
“The amount of consumer confidence is a destructive event of crude oil and gasoline demand,” said Robert Yawger, commodity analyst at investment bank Mizuho Securities.
Jamie Smyth’s other reports in New York
