Stock market today: Wall Street sinks as US consumers get more pessimistic about inflation, tariffs

NEW YORK (AP) — Wall Street is falling again Tuesday as U.S. households get more pessimistic about the economy because of inflation, tariffs and other policies coming from Washington.

The S&P 500 was down 1% in morning trading. It's coming off a three-day losing streak after setting an all-time high last week. The Dow Jones Industrial Average was down 138 points, or 0.3%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.9% lower.

The U.S. stock market has been sinking since the middle of last week after several weaker-than-expected reports on the economy thudded onto Wall Street. On Tuesday, the latest report said confidence among U.S. consumers is falling by more than economists expected.

To be sure, the U.S. economy still appears to be in remarkably solid shape, with growth continuing at the moment. But for the first time since June, a measure of consumers' short-term expectations fell below a threshold that usually signals a recession ahead, according to the Conference Board. The increase in pessimism was broad based and carried across all kinds of households, whether by age or incomes.

“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,” according to Stephanie Guichard, senior economist, global indicators at the Conference Board. "Most notably, comments on the current administration and its policies dominated the responses.”

Wall Street closely tracks such data because spending by U.S. households is the biggest engine driving the U.S. economy.

Within the S&P 500, the heaviest weights included high-momentum stocks that had been among Wall Street's biggest stars in recent years. Nvidia fell 3.6%, for example, while Tesla fell 7%.

Bitcoin also tumbled, falling back below $87,000, which dragged down stocks of companies in the crypto industry. MicroStrategy, the company that’s raised money with the express purpose of buying bitcoin and now goes by the name Strategy, fell 11%

Zoom Communications dropped 8.6% even though it reported stronger results for the latest quarter than expected. Analysts at UBS pointed to the company’s forecast for revenue growth in the upcoming year, which fell a bit short of their own estimate.

They helped offset a 3% rise for Home Depot, which delivered a stronger profit for the latest quarter than analysts expected. CEO Ted Decker, though, said the retailer is still contending with an uncertain economy and higher interest rates, which hems in customers' ability to spend on home improvements. The retailer also gave financial forecasts for 2025 that fell short of analysts' expectations.

Keurig Dr Pepper rose 5% after the company behind Snapple, Canada Dry and K-cup coffees reported better results for the end of 2024 than analysts expected. Growth was stronger for its U.S. operations than for its international business, which contended with a heavy drag caused by shifting foreign-currency values.

The pace of profit reports is slowing, but what's perhaps the most anticipated report is still to come on Wednesday. That's Nvidia, which has grown to become one of Wall Street's most influential stocks because of nearly insatiable demand for its chips.

Wednesday will provide the first earnings report for the chip company and its CEO, Jensen Huang, since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it developed a large language model that can compete with big U.S. rivals without having to use the top-flight, most expensive chips.

That called into question all the spending Wall Street had assumed would go into not only Nvidia’s chips but also the ecosystem that’s built around the AI boom, including electricity to power large data centers.

In the bond market, Treasury yields pulled back as investors herded into investments that are generally seen as safer when prospects for the U.S. economy look rockier. They've been swinging sharply since President Donald Trump’s election, amid uncertainties about how how policies on tariffs, immigration and taxes could affect the global economy.

Dramatically altering relations under Trump, the United States split with its European allies by refusing to blame Russia for its invasion of Ukraine in votes on three U.N. resolutions Monday seeking an end to the three-year war.

Additionally, Trump has antagonized U.S. trading partners recently, threatening to raise tariffs and inviting them to retaliate with import taxes of their own. Trump said Monday that tariff hikes on imports from Canada and Mexico will move ahead after a one-month delay.

The yield on the 10-year Treasury fell to 4.28% from 4.40% late Monday, which is a notable-sized move for the bond market.

In stock markets abroad, indexes were mixed in Europe after falling across much of Asia. Tokyo’s Nikkei Nikkei 225 lost 1.4% after markets in Japan reopened from a holiday on Monday.

___

AP Business Writers Elaine Kurtenbach and Matt Ott contributed.