For three consecutive months, the Conference Board’s Consumer Confidence Index® has been rising—but not anymore. The report released today showed that there has been a deep decline in the month of June. The results are based on surveys of 5,000 U.S. households. For the most part, the consumers surveyed were most pessimistic about jobs and business outlook. So what does that have to do with the market? A reduction in consumer confidence means that consumers will be less likely to spend money, which can actually help to hurt the economy. In this case, since consumers are worried about jobs and business growth, decreased spending could turn this into a self-fulfilling prophecy—but that won’t stop the possible decrease in spending.
Upon release of this news, the Dow Jones Industrial Average fell 268.22 points to close at 9,870.30 erasing much of the gains made through the month of June.
European and Asian markets were all down significantly on Tuesday with the FTSE and DAX each down more than 3% and France’s CAC 40 and the Shanghai Composite each down more than 4%.