Wall Street stocks crash as consumer confidence hits 4-year low

Wall Street tumbled on Tuesday as a sharp 4-year decline in consumer confidence rattled investors already on edge over Donald Trump’s latest tariff announcement. The S&P 500 plunged 0.9%, extending its four-day losing streak, while the Nasdaq collapsed 1.8%, wiping out last week’s record highs, per data from Google Finance.

The Conference Board reported that consumer confidence for February sank 7 points to 98.3, a far steeper drop than the 102.5 estimate from Wall Street analysts, and it shows a crack in consumer spending power, with Americans now expecting inflation to rise to 6% over the next year, up from 5.2% last month. The weak outlook pushed stocks lower, with investors scrambling to assess the potential for a recession.

Tech stocks sink as inflation fears mount

The tech-heavy Nasdaq bore the brunt of the sell-off, as investors dumped growth stocks in the face of rising uncertainty. Tesla collapsed 7.8%, making it one of the worst performers of the day, while Palantir slid 3.6%. The Magnificent Seven tech giants, which have fueled much of Wall Street’s recent gains, all traded lower, erasing billions in market value.

Meanwhile, world tech stocks have risen a MASSIVE ~1,700% since the beginning of 2009. By comparison, global stocks excluding the Technology, Media, and, Telecom (TMT) sector have gained just ~300%.

Tech equities have more than DOUBLED since October 2022 while the remaining stocks are up just 40%. The US technology sector has been one of the major beneficiaries of this trend. Since October 2022, the Nasdaq 100 index has officially risen over +100%. This market needs Big Tech.

Anyway, Bitcoin, a favorite among risk-hungry investors, also took a brutal hit, crashing 7.5% to $86,940. Traders pointed to rising inflation expectations and higher interest rates as factors squeezing riskier assets, with many pulling back from crypto and AI stocks. Nvidia lost 2%, extending its weekly drop to 13%, while Meta Platforms declined 1.2%.

Bank stocks followed the downward spiral, as Goldman Sachs, Wells Fargo, and JPMorgan Chase each slid more than 1%. Traders are now questioning whether the Federal Reserve’s efforts to curb inflation could end up triggering a worse economic slowdown.

Trump’s economic and geopolitical games

At a White House meeting with French President Emmanuel Macron on Monday, Trump confirmed that a 25% levy on Canadian and Mexican imports will take effect next week. “These tariffs are necessary,” Trump told reporters. “We have to protect American workers.”

The announcement affected commodity markets, as aluminum prices surged even before the tariffs were officially enacted, adding more pressure to rising costs.

The inflation threat had already been looming, with January data showing a surprise jump to 3%, driven partly by an avian flu outbreak that sent egg prices surging.

President Donald Trump is seeking to escalate U.S. semiconductor controls aimed at China, according to a report from Bloomberg.

Trump’s economic policies faced severe legal setbacks on Tuesday, as a trio of federal judges issued rulings against his administration.

In Washington, D.C., Judge Loren Alikhan extended a block on Trump’s freeze of federal spending for grants, loans, and financial aid. The judge blasted the spending freeze, writing, “Defendants either wanted to pause up to $3 trillion in federal spending practically overnight, or they expected each federal agency to review every single one of its grants, loans, and funds for compliance in less than twenty-four hours. The breadth of that command is almost unfathomable.”

The spending freeze is part of Trump’s D.O.G.E initiative, a cost-cutting measure led by Elon Musk to slash government expenditures. The ruling temporarily pauses the department, putting another roadblock in Trump’s economic overhaul.

Meanwhile, in Washington state, Judge Jamal Whitehead blocked Trump’s executive order halting the Refugee Admissions Program.

Whitehead ruled that while Trump has the authority to regulate refugee entry, he “cannot ignore Congress’ detailed framework for refugee admissions and the limits it places on the president’s ability to suspend the same.”

In the third case, in D.C. federal court, Judge Amir Ali for a third time ordered the Trump administration to release foreign aid funds.

Ali’s order came at the end of a hearing where an attorney for aid groups told him that the money the judge previously had said should be disbursed to the group remained frozen.

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