The S&P 500 was down 0.7% in morning trading. It’s coming off a three-day losing streak after setting an all-time high last week
US stock indexes are bracing for another tumble this Tuesday, as fresh signs emerge that inflation, tariffs, and a slew of policies from Washington are dampening consumer spirits about the economy’s prospects.
The S&P 500 dipped by 0.7% during morning trades, following a three-day dip despite hitting a record high last week. Meanwhile, the Dow Jones Industrial Average dropped 78 points, or 0.2%, as of 10:15 a. m.
Eastern time, with the Nasdaq composite taking a steeper dive at 1.4% lower. The American stock market has been on the back foot since last week, hit by a series of economic reports falling short of expectations. This Tuesday, new data revealed a sharper-than-anticipated decline in US consumer confidence.
For the first time since June, a key gauge of consumers’ near-term outlook slipped below a level often seen as a harbinger of recession, as per the Conference Board. The growing gloom was widespread, spanning various age groups and income brackets.
“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,” noted Stephanie Guichard, senior economist for global indicators at the Conference Board. “Most notably, comments on the current Administration and its policies dominated the responses.”
Market pressure also came from previously soaring high-growth stocks, with Nvidia dropping 3.3%, and Tesla plummeting 5.8%. Bitcoin took a hit, plummeting towards $87,000, which in turn affected the shares of companies within the crypto sector. MicroStrategy, a firm that has raised funds specifically to invest in bitcoin and now operates under the name Strategy, saw its shares drop by 9.9%.
Zoom Communications also experienced a 9.3% fall in share price despite reporting better-than-expected results for the latest quarter. UBS analysts attributed this to the company’s revenue growth forecast for the upcoming year, which fell slightly short of their own predictions.
However, these losses were somewhat offset by a 3% rise in Home Depot shares after the company reported higher profits for the latest quarter than anticipated. Despite this, CEO Ted Decker acknowledged that the retailer is grappling with an uncertain economy and increased interest rates, which limit customers’ home improvement spending.
The company’s financial forecasts for 2025 also failed to meet analysts’ expectations. Keurig Dr Pepper saw a 3.9% increase in shares after the company, known for brands like Snapple, Canada Dry and K-cup coffees, reported better end-of-2024 results than predicted. The company’s US operations saw stronger growth compared to its international business, which faced challenges due to fluctuating foreign currency values.
While the flurry of profit reports is slowing down, all eyes are on Nvidia’s report due on Wednesday. The chipmaker has become one of Wall Street’s most influential stocks due to the high demand for its products.
Wednesday will see the first earnings report from chip giant and its CEO, Jensen Huang, since Chinese newcomer DeepSeek shook up the artificial intelligence sector by claiming it has developed a large language model that can compete with major U.S. competitors without needing the most high-end, costly chips. This has cast doubt on the anticipated investment in not only Nvidia’s chips but also the infrastructure surrounding the AI surge, including power for large data centres.
In the bond market, Treasury yields have retreated as the policies of President Donald Trump continue to send shockwaves globally. In a significant shift under Trump’s administration, the United States broke ranks with its European allies by refusing to hold Russia accountable for its invasion of Ukraine in three U.N. resolutions voted on Monday, aimed at ending the three-year conflict.
Furthermore, Trump has recently ruffled feathers among US. trade partners, threatening to increase tariffs and encouraging them to retaliate with their own import taxes. On Monday, Trump confirmed that tariff hikes on imports from Canada and Mexico would proceed after a one-month delay.
The yield on the 10-year Treasury dropped to 4.29% from 4.40% late Monday. Overseas stock markets presented a mixed picture, with indices fluctuating in Europe following declines across much of Asia. Tokyo’s Nikkei 225 fell by 1.4% as markets in Japan resumed trading after Monday’s public holiday.
