Stocks were lower on Tuesday as market participants looked for direction amid continuing fears of an incoming economic slowdown. The Dow Jones Industrial Average nearly 500 points, while the S&P 500 Index and Nasdaq Composite dropped around 2% and 3%, respectively.
Wall Street turned negative on Tuesday after a new report showed consumer confidence fell in June as Americans continue to worry about inflation. Investors are concerned that deteriorating outlooks will lead to a slowdown in spending and overall economic activity as consumers brace of a possible recession.
There is current speculation amongst analyst whether or not the U.S. economy is already in a recession. On Tuesday, Ark Invest CEO Cathie Wood told CNBC's "Squawk Box" that the U.S. is currently experiencing an economic downturn. The popular investors said inflation has turned out to be hotter than she had anticipated due to supply chain disruptions and geopolitical risks.
However, the National Bureau of Economic Research (NBER) is the only institution that officially declares recessions. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting over a few months, demonstrated in real GDP, real income, employment, industrial production, and wholesale retail sales.
Here's how the market settled on Tuesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Consumer confidence drops in June:
The Conference Board's latest reading on consumer confidence for June showed Americans expectations fell to their lowest level in nearly a decade. This report follows consumer sentiment data from the University of Michigan's released last week dropped to a record low of 50.2.
The institution's consumer confidence index fell to 98.7 in June from 103.2 in May. Beneath the headline, the report's expectations index--which measures concerns about income growth, the job market, and overall business conditions--fell to 66.4, the lowest reading since March 2013.
"Consumers' grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices," said Lynn Franco, senior director of economic indicators at The Conference Board, in a statement. "Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year-end."
