Wall Street ends mixed in the face of mounting uncertainties

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. The S&P 500 and the Nasdaq both notched their fourth consecutive sessions in the red, while the Dow ended the day modestly higher. “This is clearly a risk-off day and a continuation of a risk-off month,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “Many companies are expressing caution about the direction of consumer spending at the moment and today’s consumer confidence number bears that out.” 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 President Donald Trump’s administration. Tuz said the political environment was not helping. “Headlines have been pretty dramatic … and as a result consumers and maybe businesses are sitting on their hands to see how things shake out before making major purchasing decisions or other business decisions,” Tuz said. “There are just lots of reasons to put off buying things today, including stocks.”

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), opens new tab, widely known as the “fear index,” spiked to its highest level since January 27. Bitcoin , often viewed as a barometer of investor risk appetite, dropped 6.1%.