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US stocks fell across the board on on Tuesday, as President Donald Trump's revived tariff threats and potential toughening of China curbs weighed on market optimism and the chances of interest-rate cuts.
Consumer confidence also plummeted in February, notching its biggest monthly decline in more than four years as 12-month inflation expectations jumped and recession fears escalated.
The tech-heavy Nasdaq Composite (^IXIC) fell around 1.6% on the heels of a tech-led selloff on Monday. The benchmark S&P 500 (^GSPC) dropped roughly 0.7%, while the Dow Jones Industrial Average (^DJI) fell about 0.1%.
The biggest move in markets early Tuesday, however, came from the cryptocurrency markets, where the price of bitcoin (BTC-USD) tumbled below $90,000 for the first time since November.
Bitcoin touched a low closer to $86,000 in the early morning hours, its lowest since Nov. 15. The price of ether (ETH-USD), the world's second-largest cryptocurrency, fell over 10% to below $2,400 early Tuesday. Crypto-related stocks including Coinbase (COIN) and Strategy (MSTR), were also under pressure early Tuesday.
Trump's signal that his trade overhaul isn't over has unsettled markets wondering about the impact on growth prospects. Investors are parsing his brief comment that tariffs on Mexico and Canada will go forward next week.
The benchmark 10-year Treasury yield (^TNX) fell to its lowest level this year, around 4.3%, amid growing belief that tariffs will weaken the US economy. That prompted traders to bump up bets on interest-rate cuts.
At the same time, his administration is said to be pursuing tougher chip curbs on China, after Trump issued a directive to limit investments between the US and the top trading partner. AI chip giant Nvidia's (NVDA) stock was in focus with its highly anticipated earnings due Wednesday. The company is already facing headwinds from tariffs and export controls.
Elsewhere in earnings, Home Depot's (HD) fourth quarter revenue beat Wall Street's low expectations.
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Consumer confidence declines sharply as 12-month inflation expectations surge
Consumer confidence declined sharply in February as more Americans felt uneasy about the future state of the US economy, according to new data released Tuesday morning.
The Conference Board's Consumer Confidence Index for February came in at a reading of 98.3, a significant drop from January's revised 105 reading and short of the 102.5 reading expected by economists.
“In February, consumer confidence registered the largest monthly decline since August 2021,” said Stephanie Guichard, senior economist of global indicators at The Conference Board. “This is the third consecutive month-on-month decline, bringing the Index to the bottom of the range that has prevailed since 2022."
The "Present Situation Index," which measures consumers' assessment of current business and labor market conditions, fell to 136.5 in February from 139 in January.
The "Expectations Index," which tracks consumers' short-term outlook for income, business, and labor market conditions, also fell to 72.9 in February from 82 last month. Historically, a reading below 80 in that category signals a recession in the coming year. This was the first time since June 2024 that the index came in below that threshold.
Meanwhile, average 12-month inflation expectations jumped from 5.2% last month to 6% in February.
"This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs," Guichard said. "References to inflation and prices in general continue to rank high in write-in responses, but the focus shifted towards other topics."
"There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current Administration and its policies dominated the responses."
Tech stocks, bitcoin under pressure
The major indexes struggled to mount a comeback on Tuesday, with tech stocks under pressure.
The tech-heavy Nasdaq Composite (^IXIC) fell around 0.3%, while the benchmark S&P 500 (^GSPC) hovered around the flatline. The Dow Jones Industrial Average (^DJI) inched up about 0.4%.
Bitcoin (BTC-USD) was a standout with the largest cryptocurrency falling below $90,000 for the first time since November.
US home prices increases picked up pace in December
Home prices rose at a faster rate in December than the previous month, providing little relief to potential homebuyers.
The S&P Case-Shiller National Home Price Index rose 3.9% from a year earlier in December on a seasonally adjusted basis, higher than November’s 3.7% annual increase.
The data captures a three-month period through December when mortgage rates remained steady at around 7%, a double whammy for buyers. The national index hit a record high for the 19th consecutive month.
On a monthly basis, prices increased 0.5% over the previous month in December, up from the 0.4% November’s monthly gain.
“The S&P CoreLogic Case-Shiller Index continues to highlight the upward trend of home prices nationally,” Brian D. Luke, head of commodities at S&P CoreLogic, said in a statement.
“Through this recent market cycle, the ability of Americans to grow wealth by participating in the upside of the US housing market, particularly if done through a leveraged position by securing a mortgage, has proven to be historically beneficial," Luke added.
The index tracking home prices in the 20 largest metropolitan areas gained 0.5% in December, higher than Bloomberg consensus estimate of 0.4%. The 20-city index jumped 4.5% compared to last December.
BofA strategist warns S&P 500 rally draws investor skepticism
Bloomberg reports:
Chegg vs. Google: AI war threatens online learning pioneer
Chegg Inc. (CHGG) is taking Alphabet Inc. (GOOG) to court, accusing Google's AI Overviews (AIO) product of gutting its web traffic and forcing a strategic business review. Once a go-to for students needing homework help, Chegg claims Google's AI tools are siphoning users away by repurposing its content while keeping them locked within Google's ecosystem.
The impact has been brutal - Chegg's stock tumbled 22% in pre-market trading on Tuesday.
Read more here.
Home Depot stock slips after earnings as home improvement challenges come into focus
Home Depot stock edged lower in premarket trading after the home improvement retailer missed Wall Street's earnings estimates. Notably, Home Depot's same-store sales growth turned positive after eight straight quarters of declines.
Yahoo Finance's Brooke DiPalma reports:
Good morning. Here's what's happening today.
Economic data: FHFA house price index (December); S&P CoreLogic CS 20-city (December); Conference Board Consumer Confidence (February); Richmond Fed manufacturing index (February)
Earnings: American Tower (AMT), AMC (AMC), Cava (CAVA), First Solar (FSLR), The Home Depot (HD), Instacart (CART), Intuit (INTU), Keurig Dr. Pepper (KDP), Krispy Kreme (DNUT), Lemonade (LMND), Lucid (LCID), Planet Fitness (PLNT), Workday (WDAY)
Here are some of the biggest stories you may have missed overnight and early this morning:
Why market worries about tariffs may be a 'red herring'
Trump team is drawing up tougher chip curbs on China
Bitcoin slides below $90,000 as crypto selloff gathers steam
Nvidia's H20 orders jump as Chinese firms adopt DeepSeek's AI
There's an ugly trend developing in the stock market: Analyst
Buffett’s bet sparks surge in Japan trading house shares
While Warren Buffett has touted the "American miracle" of US economic growth, it's his backing of Japanese trading firms that's finding a receptive ear.
Shares in the likes of Mitsubishi (8058.T, MSBHF) and Marubeni (8002.T, MARUY) jumped in Tokyo on Tuesday after Berkshire Hathaway (BRK-B, BRK-A) revealed plans to bump up its holdings.
Mitsui (8031.T, MITSY), Itochu (8001.T, ITOCY) and Sumitomo (8053.T, SSUMY) also booked their strongest gains since last year in light of Buffett's bet.
Bloomberg reports:
Read more here.
Bitcoin falls below $90,000 to a multimonth low
Bitcoin sank below $90,000 on Tuesday to reach to its lowest level since November, when Donald Trump's election as president kicked off a rally in cryptocurrencies.
But Trump's resumed tariff push is weighing on crypto, just as they have done on tech stocks — with an added drag coming from a stream of confidence-denting headlines.
Read more here.
Chinese tech stocks rebound as Trump restricts US-China investment
Chinese tech stocks whipsawed as mainland investors helped reduce losses caused by concerns over US President Donald Trump’s decision to restrict investments between America and China.
