Investment Sentiment Shaken by Falling Consumer Confidence Index... Nasdaq Down 1.35% [New York Stock Market Briefing]

Tesla Falls 8% on Sales Volume Decline Concerns

Major U.S. indices weakened amid deteriorating consumer indicators and concerns about economic contraction.

On the 25th (local time), the Standard & Poor's (S&P) 500 index closed at 5955.25, down 28 points (0.47%) from the previous session at the New York Stock Exchange (NYSE), while the Nasdaq index fell 260.54 points (1.35%) to close at 19,026.39. The Dow Jones Industrial Average finished trading at 43,621.16, up 159.95 points (0.37%) from the previous session.

The S&P 500 and Nasdaq indices fell for the fourth consecutive trading day. By sector, among the 11 sectors comprising the S&P 500, five sectors - Consumer Staples (1.69%), Healthcare (0.86%), Industrials (0.53%), Materials (0.8%), and Real Estate (1.14%) - rose, while six sectors - Consumer Discretionary (0.84%), Energy (1.47%), Financials (0.1%), Technology (1.37%), Communication Services (1.53%), and Utilities (0.51%) - declined.

Concerns about the economy grew as the consumer confidence index fell below expectations. According to the Conference Board, the February Consumer Confidence Index fell to 98.3, its lowest in three and a half years. It dropped 11.3% from the previous month and significantly missed the expected 102. The Expectations Index, which reflects short-term outlook for income and labor market conditions, recorded 72.9, down 9.3 points from the previous month, falling below the threshold (80) that signals recession for the first time since June last year.

Tariff risks also resurfaced. President Donald Trump confirmed his stance to proceed with 25% tariffs on Canada and Mexico as soon as the 'one-month grace period' ends. The CBOE Market Volatility Index, widely known as the 'fear index,' surged to its highest level since January 27.

Among individual stocks, Tesla plunged 8.4%. This came as news broke that Tesla's electric vehicle sales in the European market plummeted 45% compared to the same month last year. Its market capitalization also fell below $1 trillion for the first time since November last year.

Nvidia also retreated 2.8%. Investment sentiment weakened following reports that the Trump administration would strengthen semiconductor sanctions against China. China is known to account for over 20% of Nvidia's total sales. Nvidia will announce its earnings after the market closes on the 26th.

As Bitcoin weakened, related stocks including Strategy, Coinbase, and Robinhood also showed weakness. Riot Auto surged over 10% on news of launching its electric SUV i8, while Solventum rose about 9% on rumors of acquisition by Thermo Fisher Scientific. Walmart, which had been falling for consecutive days, rose 4.29% thanks to bargain hunting.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the Federal Reserve cutting interest rates by 25bp (1bp=0.01%) or more in the first half is reflected at 69.2%, while the probability of maintaining rates is 30.8%. The possibility of a 25bp or more cut increased by 6.4 percentage points compared to the same time the previous day, while the possibility of maintaining rates decreased by the same amount.

Young-gi Jin, Hankyung.com Reporter young71@hankyung.com