Wall Street falls as US consumers get more pessimistic about inflation, tariffs

NEW YORK (AP) - Wall Street fell further from its record as worries worsen among U.S. consumers about inflation and tariffs. The S&P 500 fell 0.5% Tuesday for its fourth straight drop after setting an all-time high last week. The Nasdaq composite sank 1.4% as Nvidia, Tesla and other high-growth stocks that had been among the market's biggest stars fell.

A slight majority of U.S. stocks nevertheless rose, including Home Depot after its latest profit report. That helped the Dow Jones Industrial Average hold up better, and it added 0.4%. Treasury yields sank as investors looked for something safer to own. Bitcoin's price also fell sharply.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

NEW YORK (AP) - Worries about inflation and tariffs are weighing on Wall Street again Tuesday after another report said U.S. households are getting more pessimistic about the economy.

The S&P 500 was down 0.3% in late trading after trimming a loss that hit 1.2% earlier in the day. It's on track for a fourth straight drop after setting an all-time high last week.

The Nasdaq composite was 1.1% lower, with an hour remaining in trading, as momentum slammed into reverse for several influential Big Tech companies. But the majority of stocks on Wall Street were nevertheless rising, which helped the Dow Jones Industrial Average add 192 points, or 0.4%.

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

The U.S. economy still appears to be in solid shape, and growth is continuing at the moment. But for the first time since June, a measure of consumers’ expectations for the economy in the short term 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 both higher- and lower-income households, as well as older and younger ones.

"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."

The White House has the position that the lower consumer confidence reflects the overhang of the Biden administration and that recent announcements for U.S. investments by Apple and on CEO confidence reflect growth ahead.

Wall Street tracks confidence among consumers because solid spending by them has been one of the linchpins keeping the U.S. economy out of a recession despite high interest rates. And Tuesday’s report echoed what an earlier report from the University of Michigan suggested: Consumers see the current situation as OK, but they’re worried about the future.

In particular, the pessimism hit high-momentum areas of the market that had seen waves of euphoric investors pile in during recent years. Nvidia fell 1.8%, for example, while Tesla tumbled 8.7%. They were the two heaviest weights on the S&P 500.

Bitcoin likewise sank, falling back below $88,000, 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 10.7%

Zoom Communications dropped 9.4% 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.

Home Depot was the biggest reason the Dow Jones Industrial Average, which includes only 30 stocks, was doing so much better than the S&P 500 and other broader measures of the market.

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 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 generally seen as safer when the U.S. economy’s prospects look rockier. Yields have been swinging sharply since President Donald Trump's election, amid uncertainties about how his policies on tariffs, immigration and taxes could affect the global economy.

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 4.29% 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.