Stock Market Update: Wall Street Declines Amid Growing Consumer Concerns Over Inflation and Tariffs

NEW YORK (AP) — Wall Street is experiencing a downturn on Tuesday as American families express growing concerns about the economy, primarily due to inflation, tariffs, and various government policies.

The S&P 500 fell by 0.8% during midday trading, continuing a downtrend after hitting an all-time high last week. The Nasdaq composite dropped 1.7%, while the Dow Jones Industrial Average showed a slight gain of 25 points, or 0.1%.

Since the middle of last week, the U.S. stock market has been on a downward path, triggered by several disappointing economic reports. On Tuesday, new data revealed that consumer confidence is declining more than experts had predicted.

Despite the dip in confidence, the U.S. economy seems to be stable for now, with ongoing growth. However, for the first time since June, a key measure of short-term consumer expectations fell below a level that typically indicates a looming recession, according to The Conference Board. This growing pessimism spans across various income levels and age groups.

Stephanie Guichard, a senior economist with The Conference Board, noted, “There was a sharp increase in mentions of trade and tariffs, returning to levels not seen since 2019.” She highlighted that comments regarding current policies significantly influenced consumer sentiments.

Wall Street pays close attention to these trends because household spending is the main driver of the U.S. economy. The report echoed an earlier finding from the University of Michigan, indicating that while people feel okay about their current situation, there’s worry about what lies ahead.

Among the top movers in the S&P 500, many previously high-performing stocks, like Nvidia, fell—down 3.2%—while Tesla saw a drop of 8.5%.

Bitcoin also took a hit, sinking below $87,000, which affected crypto-related stocks. For instance, MicroStrategy, a firm known for its investments in Bitcoin, fell by 11.1%.

Zoom Communications reported better-than-expected earnings for the latest quarter but still saw its stock drop by 9% due to a forecast for revenue growth that didn’t meet analysts’ estimates. On a brighter note, Home Depot saw its stock rise by 3.5%, fueled by stronger profits than anticipated. However, CEO Ted Decker warned of challenges posed by an uncertain economy and high-interest rates, impacting customer spending on home improvements.

Interestingly, the Dow held steady compared to the S&P 500 because of Home Depot’s strong performance. Overall, slightly more stocks rose than fell on Wall Street; however, many of the gainers were smaller companies, which don’t weigh as heavily on the main indexes.

Keurig Dr Pepper’s stock climbed 4.5% after reporting better-than-expected results for the end of 2024. Their U.S. operations grew more robustly than those abroad, which faced challenges from fluctuating foreign currencies.

Looking ahead, investors are particularly focused on Nvidia’s upcoming earnings report, especially after a Chinese company claimed it developed a competing AI model that doesn’t rely on expensive chips. This announcement raised questions about future demand for Nvidia’s products, which could impact both the company and the broader AI market.

In the bond market, Treasury yields decreased as investors sought safer options amid a rocky economic outlook. The yield on the 10-year Treasury fell from 4.40% to 4.30%, indicating a notable change in the market.

Globally, stock markets were mixed in Europe after declines in much of Asia. Tokyo’s Nikkei 225 dropped by 1.4% after reopening from a holiday.