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Wall Street stocks skated Tuesday after deepening pessimistic data on consumer confidence in investors’ concerns that Donald Trump’s tariffs would knock on the world’s biggest economy.
The Blue-chip S&P 500 index fell 0.1%, while the high-tech heavy Nasdaq composite fell 0.8% in afternoon trading in New York.
After Trump’s election in November, US stocks rose sharply in hopes of enacting professional business economic policies, pushing the S&P 500 to a record high on last Wednesday.
But a series of disappointing reports on everything from consumer sentiment to home sales has slided the S&P 500 for the past four days.
Conference committee measurements of consumer confidence were expected to slide 7 points 98.3 points in February, the sharpest decline since August 2021, and much worse than 102.5 Wall Street .
Consumer short-term outlook for the economy has declined for the first time since June 2024, typically below the recession threshold.
At the same time, the report showed that inflation expectations for an average of 12 months rose from 5.2% to 6%.
“This increase is likely to reflect a mix of factors including sticky inflation, as well as a surge in the prices and expected impacts of tariffs for major household staples like eggs. “We’re doing that,” said Stephanie Gyade, senior economist at the conference committee.
Guichard added: “Trade and tariff mentions have increased sharply. …Most notable is that comments on the current administration and its policies dominated the response.”
JP Morgan economist Abiel Reinhart reiterated the sentiment, saying, “It appears that political headlines are beginning to be drawn back in the emotions.”
Investors say they see growing lists of negative economic data and the potential for US growth from Trump’s unpredictable tariff announcements, according to Nomura derivatives strategist Charlie McKelligott. “It’s getting more and more uncomfortable.”
He added that Nomura’s clients have recently increased their purchases of derivatives known as options.
Defense inventory, including drink maker Dr. Pepper and toothpaste maker Colgate Palmo Live, rose more than 2% on Tuesday as investors shifted to pockets of markets where the economy normally performs when it cools. Real estate stocks, which benefit from low interest rates, have also recovered.
US government debt, which tends to rise during market growth, has acquired prices and lowered yields. The Treasury yield in 2010 fell 0.1 percentage points to 4.29%, the lowest since mid-December.
Tech stocks that have skyrocketed in recent years and are usually working well during economic boom times have slipped. Peter Thiel’s data analytics company Palantir lost 3.2%, Tesla fell 8.4%, and digital ad group Applovin lost 5.9%.
“This US rotation looks defensive,” said Andrew Laptone of Societe’s Generale.
The weak economic figures and concerns about Trump’s tariff plans came as oil prices fell to two-month lows on Tuesday.
Global benchmark Brent crude fell 2.2% per barrel to $73.17, while US marker West Texas Intermediate slipped 2.3% to $69.11.
“Consumer confidence was a demand destruction event for crude and gasoline,” said Robert Yoger, a commodity analyst at investment bank Mizuho Securities.
Additional Reports by Jamie Smith of New York
