- U.S. investment markets responded positively to update on coming tariff announcements.
- While markets moved up, a new report found consumer confidence is continuing to decline.
- Trade policy turbulence has led to uncertainty in the U.S business sector.
Major U.S. stock indexes continued to move up early Tuesday following a Monday rally that was driven in large part by news that an upcoming tariff announcement by President Donald Trump may not be as sweeping as earlier anticipated.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite ended regular trading on Monday up 1.4%, 1.8% and 2.3%, respectively. All three were still in positive territory around midday on Tuesday.
On Monday, administration officials were signaling that Trump’s April 2 tariff announcement, which was earlier anticipated to be a sweeping global decree, is more likely to target a group of the most significant U.S. international trade partners.
A new round of sector-specific tariffs that were also expected to be unveiled on that date, which Trump has labeled “Liberation Day,” are likely to be delayed, according to recent comments from presidential aides.
Trump officials publicly acknowledged in recent days that the list of target countries may not be universal, and that other existing tariffs, like on steel, may not necessarily be cumulative, which would substantially lower the tariff hit to those sectors, per a report from Bloomberg. That includes comments from Trump himself, who has increasingly focused his remarks on the reciprocal measures.
But while Trump staffers are signaling that the April 2 unveiling of new levies on imported goods will be somewhat lighter than anticipated, the president himself is still sounding bullish on the coming decree.
“April 2 is going to be liberation day for America,” Trump said on Friday from the Oval Office. “We’ve been ripped off by every country in the world, friend and foe.”
Consumer confidence continuing to slide
While investors responded positively to the apparent revamp of upcoming tariff announcements, Monday also saw the release of new data reflecting U.S. consumer confidence is continuing to decline amid the tumult of federal policy changes.
Monday’s Consumer Confidence Index reading from the Conference Board found U.S. consumer confidence fell by 7.2 points in March to 92.9 and consumer’s feelings about current business and labor market conditions dropped 3.6 points to 134.5, continuing a trend of declines in both measures. The Conference Board’s survey of consumers’ short-term outlook for income, business and the labor market fell 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a coming recession.
“Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022,” Stephanie Guichard, senior economist of global indicators at The Conference Board, said in a statement accompanying the new report. “Of the index’s five components, only consumers’ assessment of present labor market conditions improved, albeit slightly. Views of current business conditions weakened to close to neutral. Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low.
“Meanwhile, consumers’ optimism about future income — which had held up quite strongly in the past few months — largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”
The new Conference Board data follows the latest national reading from the University of Michigan’s closely watched Surveys of Consumers, released earlier this month, that found U.S. consumer sentiment declined even further in the first part of March, down 11% from February.
“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences,” wrote Surveys of Consumers director Joanne Hsu in the report. “Consumers from all three political affiliations are in agreement that the outlook has weakened since February.”
On Tuesday, Bret Kenwell, U.S. investment analyst at eToro, told CNBC that declining sentiment about the U.S. economy isn’t limited to consumers.
“Sentiment continues to wane among investors, consumers and businesses as economic concerns and economic policy uncertainty takes its toll,” he said. “Until there’s more certainty on the tariff and macro front, sentiment and confidence remain vulnerable.”
