The U.S. stock market fell on Tuesday as consumer confidence dropped amid growing pessimism about inflation and tariffs. The S&P 500 declined 0.5%, while the Nasdaq composite sank 1.4%. The Dow Jones Industrial Average managed to rise 159 points, or 0.4%, as most stocks saw gains.
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A report from The Conference Board showed a significant decrease in consumer confidence, exceeding economists’ expectations. A key measure of consumers’ short-term economic expectations dipped below the recession-signaling threshold for the first time since June.
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Stephanie Guichard, senior economist at The Conference Board, noted that the increase in pessimism was widespread across income and age groups.
The possibility of lower US economic growth is now the talk of the town, amplified by this weekend’s remarks from high-level officials.
As you would expect, the market impact so far this early morning in Asian trading includes lower oil prices (with Brent again joining WTI below… pic.twitter.com/egyftI2GpR— Mohamed A. El-Erian (@elerianm) March 10, 2025
The White House attributed the dip in consumer confidence to the policies of former President Joe Biden, while also highlighting recent positive announcements as hopeful indicators of future growth.
Consumer confidence impacts market performance
Consumer confidence is closely watched by Wall Street, as strong consumer spending has been crucial in keeping the U.S. economy afloat.
Price made new lows last week, yet the number of stocks didn't. Doesn't mean the lows are in, but a positive sign. pic.twitter.com/XEbu3B2zCL
— Ryan Detrick, CMT (@RyanDetrick) March 10, 2025
The report echoed similar findings from the University of Michigan, suggesting that consumers view the current situation as manageable but have growing concerns about the future. High-momentum areas of the market were hit particularly hard by the pessimism. Nvidia dropped 2.8%, and Tesla tumbled 8.4%, becoming the two largest drags on the S&P 500.
Bitcoin also suffered, falling back toward $88,000, which negatively impacted stocks of companies involved in cryptocurrency. Despite these dips, most stocks on the market managed to post gains, allowing the Dow Jones Industrial Average to stay in positive territory. The mixed performance reflects the current uncertainty in the market as investors grapple with conflicting economic indicators and widespread consumer pessimism.
Image Credits: Photo by Maxim Hopman on Unsplash
