The US markets have been on a selling spree. On Tuesday, the key indices in the US fell for the fourth consecutive session. The S&P 500 lost 0.5% while the Nasdaq slipped 1.4%. Weaker-than-expected consumer confidence data continue to weigh on sentiment even as the markets are grappling with trade tariff implications.
A look at 3 reasons why the US markets are under pressure
Slowing economy indicators
Wall Street continued selling on Friday as new US data hinted towards a slowing economy and sticky inflation. Following this investors ran towards safe havens, raising gold prices and declining US bond yields.
The University of Michigan consumer sentiment index declined to 64.7 in February. This represents a decline of nearly 10% and is a sharper drop than anticipated due to consumer worries about rising inflation resulting from potential new tariffs. The survey’s projected inflation rate for the next five years was 3.5%, marking the highest level since 1995. In addition, home sales in the U.S. declined more than anticipated last month, reaching 4.08 million units.
ALSO READWhy did US markets fall – S&P 500 hits a 5 week low? Trump’s Tariff jitters
On Monday, the stocks couldn’t reverse from Friday’s sharp sell-off as Trump’s deadline comes to an end next week. The markets jittered as Trump said tariffs on Canada and Mexico “will go forward” after the monthlong postponement deadline is about to end. The tech-heavy Nasdaq Composite felt the highest tremors, falling 1.21% to end at 19,286.92. “The tariffs are going forward on time, on schedule,” said Trump.
Lower consumer confidence
Trump’s tariff war on its trade partners has increased American investors’ expectations of rising inflation. The fall in the US stock market continued for the fourth straight session on Tuesday as lower-than-anticipated consumer confidence data from the Conference Board weighed on stocks. US consumer confidence in February saw its largest monthly decline since August 2021. A bunch of recent reports, including disappointing retail sales numbers have spurred traders’ worries around the economy over the past week.
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