Wall Street slides as US consumer sentiment falls to two-year low amid tariff fears – as it happened

Time to wrap up.

US consumer confidence has soured this month, as Americans fear that new tariffs will push up inflation and endanger their job security.

The University of Michigan’s measure of consumer sentiment fell to 57.0 this month, down from 64.7 in February, and 28% lower than a year ago.

It warned:

“This month’s decline reflects a clear consensus across all demographic and political affiliations.”

In another blow, the US Federal Reserve’s preferred measure of inflation, core PCE, picked up this month.

This batch of economic gloom has hit the mood on Wall Street, where the S&P 500 index is now down 2%.

Trade war jitters are having a wider economic impact too: Canada’s economic growth has come to a halt in February to the year as tariff threats mounted.

Economists have warned that a trade war could have a serious impact on global growth, if it hits consumer sentiment and the financial markets.

China’s president Xi Jinping gatherered a group of top global CEOs to Beijing today, to urge them to protect global supply chains.

In the UK, Thames Water revealed its chief financial officer Alastair Cochran will unexpectedly step down at the end of this month as the company fends off a cash crunch.

New data has confirmed Britain’s economy all-but-stagnated in the second half of last year, although the first half was stronger than previously thought.

Wall Street has sunk deeper into the red, as investor sentiment is dented by the drop in US consumer confidence this month.

The S&P 500 share index is now down 99 points, or 1.75% today, at 5,593.

The mood on the New York stock exchange has been hurt by the University of Michigan’s report that American consumers grew gloomier this month, fearing higher prices and increased job insecurity.

News that the Federal Reserve’s favourite inflation measure, core PCE, has risen has also dampened the mood.

Pantheon Macroeconomics’ senior US economist Oliver Allen has said (via the FT) that the consumer spending data was “disappointing” and that an “underlying slowdown in demand growth also seems to be under way”.

European stock markets have closed for the day, and the week, in the red.

The pan-European Stoxx 600 was down around 0.8%, as investors worry about the threat of wide-ranging tariffs being annouced by Donald Trump next week.

Germany’s DAX index fell around 1%.

But in London, the FTSE 100 only lost 0.08%, or 7 points, to close at 8658.

Carl Weinberg, chief economist at High Frequency Economics, explains (via Marketwatch) why falling consumer confidence is a problem:

“Consumer spending has been the driving force behind the economic expansion for nine of the last ten quarters. If consumer spending falters in the first quarter, GDP growth will slow.”

Here’s a chart showing the drop in US consumer confidence this month:

Canada’s economy appears to have stalled in February, new data shows, as trade fears hit America’s neighbour.

Statistics Canada has reported that Canadian GDP rose by 0.4% in January, before growth fizzled out last month.

It explains:

Advance information indicates that real GDP by industry was essentially unchanged in February. Increases in the manufacturing and finance and insurance sectors were offset by decreases in the real estate and rental and leasing sector, the oil and gas extraction subsector and the retail trade sector.

Today’s consumer sentiment report shows that “inflation expectations are surging due to Trump’s tariffs”, reports Heather Long of the Washington Post:

Stocks are falling more sharply on Wall Street, following the drop in US consumer confidence.

The S&P 500 share index is now down 1.4%, having lost 81 points to 5,612 points.

Meanwhile, at the House of Lords peers have heard that Britain should consider imposing 25% tariffs on US products fuelling obesity if a trade war breaks out.

Labour’s Lord Brooke of Alverthorpe suggested “Cola, Pepsi, KFC, Big Macs” should be among the items affected, following this week’s announcement of a 25% tariff on cars entering the US.

Speaking during a House of Lords debate on the UK food system and obesity, Lord Brooke said:

“If we get into a war with the Americans on trade and we have to retaliate, can I just to suggest to them that we have tariffs of 25% on a few of the American products which are causing us difficulties - Cola, Pepsi, KFC, Big Macs, you name them, many of these are responsible for the excess calories which we consume.

“That is probably not likely to happen but I hope it will be borne in mind.”

Donald Trump’s trade wars are hurting US consumer sentiment, a new survey shows, as Americans anticipate high prices from new tariffs.

US consumer sentiment has fallen to its lowest in over two years, the latest poll from the University of Michigan shows.

Its index of Consumer Sentiment fell to 57.0 this month, down from 64.7 in February, and 28% lower than a year ago. That’s the lowest reading since 2022.

A measure of consumer expectations for the economy fell particularly sharply.

Surveys of Consumers director Joanne Hsu explains:

The expectations index plunged a precipitous 18% and has now lost more than 30% since November 2024. This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation.

The survey also showed a jump in long-term inflation expectations:

Hsu added that consumers continue to worry about the potential for pain amid “ongoing economic policy developments”, a nod to Donald Trump’s push to raise tariffs on imported goods.

She says:

Notably, two-thirds of consumers expect unemployment to rise in the year ahead, the highest reading since 2009. This trend reveals a key vulnerability for consumers, given that strong labor markets and incomes have been the primary source of strength supporting consumer spending in recent years.

Wall Street has opened in the red as investors mull trade war risks, and the rise in inflationary pressures last month.

Following the rise in the core PCE inflation measure in February, the Dow Jones Industrial Average fell 53.9 points, or 0.13%, at the open to 42,245.82.

The S&P 500 fell 14.1 points, or 0.25%, at the open to 5,679.2​, while the Nasdaq Composite dropped 81.9 points, or 0.46%, to 17,722.087.