Consumer confidence drop sends S&P 500 lower

The U.S. stock market fell on Tuesday as consumer confidence dropped more than expected. The S&P 500 lost 0.5%, while the Nasdaq composite sank 1.4%. However, the Dow Jones Industrial Average added 159 points, or 0.4%.

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The Conference Board reported that consumer confidence fell below a threshold that typically signals a recession ahead.

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Stephanie Guichard, senior economist at The Conference Board, noted that “the increase in pessimism was broad-based and spanned across both higher- and lower-income households, as well as older and younger ones.” The White House responded, suggesting that the lower confidence reflects the overhang of the previous administration. They also pointed to recent investment announcements by Apple and improving CEO confidence as indicators of upcoming growth.

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

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Consumer pessimism impacts stock prices

High-momentum areas of the market were hit hard. Nvidia fell 2.8%, and Tesla tumbled 8.4%, acting as the two heaviest weights on the S&P 500. Bitcoin also sank, falling back toward $88,000, which negatively affected stocks of companies in the crypto industry. MicroStrategy, a company associated with significant investments in bitcoin, fell 11.4%, and Zoom Communications dropped 8.5%. Wall Street tracks consumer confidence closely because solid spending by consumers has been helping to keep the U.S. economy out of recession. The report from The Conference Board echoed sentiments from the University of Michigan, suggesting that while consumers see the current situation as manageable, they are increasingly worried about the future. The growing consumer pessimism and the resulting market fluctuations signal a complex economic landscape as Wall Street continues to navigate uncertain waters.