The U.S. stock market fell on Tuesday as consumer confidence continued to decline. The S&P 500 dropped 0.5%, with technology stocks leading the decline. The Nasdaq composite sank 1.4%, while the Dow Jones Industrial Average managed to add 159 points or 0.4%.
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The Conference Board reported that consumer confidence is falling faster than economists predicted.
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For the first time since June, a measure of consumers’ short-term expectations for the economy fell below a threshold that typically signals a recession ahead. This pessimism affected various demographics, including higher- and lower-income households, as well as older and younger individuals.
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
Stephanie Guichard, senior economist at The Conference Board, said, “There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Comments on the current administration and its policies dominated the responses.”
The White House attributed the lower consumer confidence to the overhang of policies from former President Joe Biden’s administration.
Consumer confidence declines affecting markets
On tap for the week ahead for the economy and markets:
The entry into effect of 25% US tariffs on steel and aluminum imports, New York Fed and Michigan sentiment surveys, JOLTS, CPI and PPI for February
In Europe, look for Germany’s industrial production and CPI , the outcome…— Mohamed A. El-Erian (@elerianm) March 9, 2025
They also highlighted recent investments in U.S. facilities by companies like Apple and increases in CEO confidence as signs of potential upcoming growth. High-momentum areas of the market that had seen investor euphoria in recent years were hit particularly hard. Nvidia fell 2.8%, while Tesla tumbled 8.4%, becoming the two heaviest weights on the S&P 500.
Bitcoin also dropped, falling back toward $88,000, which in turn dragged down stocks of companies in the cryptocurrency sector. MicroStrategy, the company that raised funds to buy more bitcoin, fell 11.4%. Zoom Communications dropped 8.5% amid the broader selloff.
Wall Street’s steep losses reflect growing concerns over the nation’s economic outlook and the impact of tariffs and trade tensions on consumer sentiment. Strong consumer spending has been a key factor in preventing a recession, and the recent reports from The Conference Board and the University of Michigan indicate that consumers view the current economic situation as stable but are growing concerned about the future.