U.S. stocks struggled on Tuesday, with the S&P 500 and the Nasdaq touching one-month lows as a dour consumer confidence report put mounting economic uncertainties into sharp relief and prompted a selloff. The mood of the consumer, who props up about 70% of U.S. GDP, has dimmed considerably in February, according to The Conference Board’s consumer confidence index, which registered its steepest monthly drop since August 2021. Rising consumer uncertainties were laid bare by an 11.3% plunge in the near-term expectations component, well below the level associated with impending recession, suggesting Americans are growing anxious about the potential negative economic impact of the policies of the new US President.
Richmond Federal Reserve President Tom Barkin said on Tuesday that current uncertainties call for a measured, cautious approach to monetary policy. Interest-rate futures imply the U.S. Federal Reserve will hold its key interest rate steady for the first half of the year, according to data compiled by LSEG. The CBOE market volatility index .VIX , widely known as the “fear index,” spiked to its highest level since January 27.
The S&P 500 .SPX lost 27.33 points, or 0.46%, to end at 5,955.92 points, while the Nasdaq Composite .IXIC lost 257.37 points, or 1.33%, to 19,029.56. The Dow Jones Industrial Average .DJI rose 161.74 points, or 0.37%, to 43,622.95. Nvidia NVDA.O dropped ahead of the chipmaker’s much-anticipated quarterly earnings report expected after the bell on Wednesday, pulling the Philadelphia SE Semiconductor index lower.
U.S. officials, in a bid to restrict Beijing’s technological capabilities, are aiming to restrict the quantity and types of Nvidia chips that can be exported to China without a license, according to a Bloomberg report. Bitcoin BTC= weakness weighed on crypto stocks Coin base COIN.O and MicroStrategy MSTR.O . Zoom Communications ZM.O slid following its disappointing annual revenue forecast. U.S.-listed shares of Li AutoLI.O jumped after the company unveiled its first electric SUV.
Eli Lilly LLY.N advanced after the drug maker said it has begun selling higher doses of its weight-loss drug Zepbound in vials in the U.S., at a discount to the injector-pen versions. Solventum SOLV.N jumped after drug manufacturer Thermo Fisher <TMO.N> said it will buy the company’s purification and filtration business for about $4.1 billion.
Reporting by Stephen Culp; Additional reporting by Johann M Cherian in Bengaluru; Editing by Nia Williams.
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