Investors are becoming increasingly cautious as the stock market resumes its downward trend, mirroring the pessimism seen among consumers.
Recent economic data and surveys indicate growing concerns about potential economic downturns and market instability.
The University of Michigan’s Survey of Consumers, released on March 14, revealed that consumer sentiment has fallen to its lowest level since 2022. Similarly, Wall Street is reflecting this negative outlook, with the Bank of America’s Global Fund Manager Survey and the CNBC Fed Survey both indicating heightened pessimism among investors. Adding to the unease, UCLA Anderson, a well-regarded economic forecasting organization, issued its first-ever “recession watch” warning on Tuesday.
Tuesday’s market sell-off dampened optimism from a brief two-session recovery on Friday and Monday. The S&P 500 fell 1.07%, the Dow Jones Industrial Average lost 0.62%, and the Nasdaq Composite dropped 1.71%. Among individual stocks, Tesla saw a decline of more than 5% following a downward price target revision by RBC Capital Markets.
With the US Federal Reserve set to meet on Wednesday, market participants are bracing for the likelihood that interest rates will remain unchanged. This expectation has contributed to investor uncertainty, as many had hoped for signals of potential rate cuts to support economic growth.
Beyond the US, global markets are also experiencing fluctuations. In Asia, Japan’s Nikkei 225 fell approximately 0.2% as investors reacted to the Bank of Japan’s decision to hold its key policy rate steady at 0.5%. The central bank cited ongoing uncertainties regarding economic activity and global trade, including potential implications of the upcoming reciprocal tariffs announced by the US administration.
Several indicators suggest that economic challenges may be ahead. The March CNBC Fed Survey showed an increase in the probability of a US recession, rising to 36% from 23% in January. The UCLA Anderson Forecast cited recent policy shifts and global economic pressures as key factors in its decision to issue a “recession watch.” Additionally, the Bank of America’s Global Fund Manager Survey reported the most significant drop in investor sentiment since March 2020.
Despite the broader market struggles, Nvidia made headlines at its GTC conference on Tuesday by unveiling new AI chips, including Blackwell Ultra and Vera Rubin, which are expected to enhance AI computing power. In a separate announcement, General Motors and Nvidia confirmed a collaboration to integrate AI-driven technologies into vehicle systems.
Meanwhile, Google made a major acquisition move, signing a $32 billion agreement to acquire cloud security startup Wiz. This all-cash deal, expected to close in 2026, represents Google’s largest acquisition to date and could serve as a bellwether for future mergers and acquisitions.
CNBC and Market Watch contributed to this report.
