Stock Market Today in Review – Consumer Confidence Falls Below 2008 Levels
Today was a good day for stock investors as the major indices—the Nasdaq 100 (QQQ), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) —finished in the green. Interestingly, the trading session was led by the real estate (XLRE) and utilities (XLU) sectors. In addition, across all three ETFs, trading volume was lower than the average. Separately, consumer confidence has taken a sharp hit and is now at levels that are even lower than during the 2008 financial crisis, according to the latest University of Michigan survey.
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Sentiment has dropped significantly across multiple income groups, with confidence sitting at around 45% for households earning under $100,000 and just above 50% for those earning more. In addition, inflation expectations have surged, with the median 12-month forecast at 6.75%, while expectations for income growth have slowed to just 0.25%. As a result, nearly 70% of people are now worried about losing their jobs, which is an anxiety level that is typically seen during a recession.
Separately, a CBS News/YouGov poll highlighted that most Americans believe President Trump's tariff policies will primarily benefit the wealthy and large corporations. Indeed, roughly three-quarters of respondents think that prices will rise due to the tariffs, and nearly half believe the policies are making them worse off. Only 42% think that the middle and working class will benefit. Unsurprisingly, the majority of Republicans support the measures and believe they will eventually add jobs, while most Democrats and independents remain skeptical.
Adding to these concerns, former Treasury Secretary Janet Yellen said that the bond market's recent troubles are due to a 'loss of confidence' in U.S. economic policy, mostly because of Trump's unpredictable tariffs. She told CNBC that rising bond yields and a weaker dollar show that investors may be losing trust in U.S. assets. Yellen also warned that these trends are unusual and worrying. She believes the Federal Reserve can step in if needed but said that the uncertainty from tariffs makes it especially hard for the Fed to manage inflation and economic growth right now.
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