Stocks edged down on Tuesday as bond yields kept climbing and new figures showed consumer confidence plummeted in September.
The Nasdaq Composite dropped 0.09%, while the S&P 500 did so 0.16%. The Dow Jones Industrial Average underperformed slightly, falling 0.25%.
The 30-year Treasury yield topped 5.6%, reaching its highest level since 2002. The benchmark 10-year note climbed 4 basis points and stood at 5.281%, near levels last seen in 2007.
Elsewhere, the Conference Board Consumer released new figures on Tuesday showing that its Confidence Index fell by 6.7 points, from 88.6 in August to 81.9.
The Present Situation Index, which surveys consumers' assessment of business and labor market conditions, and the Expectations Index, based on their outlook for income, business and labor market conditions, also plummeted.
Dana M Peterson, the Conference Board's Chief Economist, said in a statement that figures showed a notable drop. "Consumer appraisals of current business conditions became negative for the first time since September 2024. Perceptions of the current labor market also worsened, though remained within positive territory," she added.
The surge in fuel costs, which is around historical highs, were a key factor in consumers' assessment of the situation. "Consumers also frequently cited politics, trade, and employment in their write-in responses, though to a lesser extent," the document noted.
Peterson went on to say that consumers expect business conditions and the labor market to weaken further in the next six months. Almost all age and income groups shared that view: "While higher-income groups remained generally more optimistic, those with a household income of $125,000-$149,000 reported the greatest decline in confidence over the last six months."
Other surveys have also shown a deterioration of sentiment. The University of Michigan's Survey of Consumers showed last week the lowest figure in four months, standing at 48.1, compared to 51.7 in August and 55.1 last September. It is a 7% and 12.7% drop for the month and the year, respectively.
Joanne Hsu, the survey director, noted that the latest figure is down 15% compared to January. "Views of current and year-ahead expected personal finances both weakened about 10% this month, with concerns over high prices continuing to climb," Hsu said.
She went on to detail that buying conditions for durables "improved a bit, in part due to a perception that completing such purchases now would help consumers avoid higher prices in the future."
However, the "short-run outlook for business conditions plunged amid renewed worries that elevated fuel prices and re-escalating trade disputes could pass through to the economy as a whole."
As for inflation expectations for the next year, they jumped 0.6 percentage points, now clocking in at 4.6 percent as energy prices continue to soar as a result of the war in Iran.
More data is expected to illustrate inflationary pressures on Wednesday. The personal consumption expenditures price index, the Federal Reserve's preferred measure to track inflation, is expected to climb 0.3% at the all-items and core levels. That would put both figures at 3.7% and 3.3% respectively, still above the central bank's 2% goal.
