Consumer sentiment fell in the U.S. as citizens reacted to President Donald Trump’s intensifying trade war. A survey conducted by the University of Michigan found consumer sentiment has fallen to 57.9 this month in a preliminary reading. It’s worth noting that consumer sentiment hasn’t been this low since November 2022.
Investors will note that consumer sentiment is down 11% from the 64.7 reported last month. That’s a major blow to the economy after consumer sentiment rallied following President Donald Trump’s 2024 election win.
While consumers were initially positive about President Trump taking office, his actions since then have unsettled them. That includes the introduction of tariffs on goods from Canada, Mexico, and China. The President also continues to flirt with the idea of additional tariffs, including some on Europe. This has consumers worried about increased prices at a time when inflation has already jacked up the cost of living.
Will the Economy Get Better or Worse?
This is a question that consumers are taking seriously as they plan how to weather a trade war, inflation, and increased interest rates. It’s possible that economic turmoil could push the U.S. into a recession, with President Trump refusing to rule out the possibility.
On the flip side, unemployment has remained low under President Trump, signaling a strong job market. If that can remain steady throughout the President’s trade war, the U.S. economy might remain strong.
What This Means for the Stock Market
Investors are currently sharing the same sentiments as consumers, with fears about the state of the stock market. This has many turning to safe havens, such as gold or government bonds. Others have turned to less volatile stocks to ride out economic turmoil. A few examples include Kellanova (K), Gilead Sciences (GILD), and TXNM Energy (TXNM).
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