The survey, conducted by The Associated Press-NORC Center for Public Affairs Research, found that roughly two-thirds of U.S. adults said they have cut back spending over the past year because of concerns about rising costs and economic uncertainty. The findings come as the S&P 500 and Nasdaq indexes continue posting record highs fueled largely by technology and artificial intelligence-related stocks.

Government inflation data showed consumer prices have moderated from the peaks reached in 2022, but many households continue facing elevated costs for essentials including food, housing, insurance and utilities. The report indicated that many Americans do not feel broader economic improvements reflected in their daily finances.

Household Spending Pullbacks Continue

Survey responses showed consumers are increasingly delaying or reducing purchases ranging from restaurant meals and entertainment to travel and large household items.

Many respondents cited persistent inflation and concerns about future economic conditions as key reasons for tightening budgets, even though unemployment remains relatively low and wage growth has improved in some sectors.

The AP-NORC survey found that confidence in personal financial stability varied sharply across income groups, with lower-income households reporting greater difficulty managing monthly expenses and emergency costs.

Market Gains Driven by Technology Stocks

Wall Street’s recent strength has been concentrated heavily in large technology companies tied to artificial intelligence investment and semiconductor demand.

Market data showed gains in companies including Nvidia, Microsoft and other major technology firms have played a significant role in lifting benchmark indexes to all-time highs this year. Investors have continued directing capital toward AI-related sectors despite broader concerns surrounding inflation, interest rates and geopolitical instability.

The divergence between stock market performance and consumer sentiment reflects how financial market gains are often concentrated among wealthier households with greater exposure to equities and retirement investments.

Inflation Remains a Political and Economic Issue

Although inflation has eased compared with previous years, many consumers surveyed said prices remain significantly higher than before the pandemic, particularly for groceries, insurance and housing-related expenses.

Federal Reserve officials have continued monitoring inflation trends closely as policymakers weigh the timing of potential interest-rate adjustments. Government economic reports have shown slower inflation growth in recent months, but consumer surveys continue indicating frustration over the cumulative rise in living costs.

Associated Press reporting noted that economic sentiment has remained politically significant ahead of the U.S. presidential election cycle, with many voters expressing dissatisfaction over affordability despite steady job growth and resilient corporate earnings.

Consumer Confidence Remains Uneven

The survey results highlighted persistent uncertainty about the direction of the U.S. economy, particularly among households without substantial savings or investment assets.

While financial markets have benefited from optimism surrounding artificial intelligence and corporate profitability, many consumers remain focused on everyday expenses and borrowing costs.

Details regarding whether consumer spending pullbacks could significantly affect broader economic growth remain unclear.

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Wall Street is set to open lower Monday morning after President Donald Trump reaffirmed his commitment to increasing tariffs, despite growing concerns about their economic impact.

Markets React to Tariff Uncertainty

• S&P 500 Futures: Down 0.1%
• Dow Jones Futures: Down 0.3%
• Nasdaq Futures: Unchanged

Trump, speaking to reporters aboard Air Force One, made it clear that he has no plans to reverse the tariff hikes scheduled for April 2.

“April 2 is a liberating day for our country,” Trump said. “We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”

The new tariffs will target autos, steel, and aluminum, adding pressure to industries already grappling with economic uncertainty.

Retail Sales Report and Consumer Confidence

Later today, the government will release its retail sales report, offering insight into consumer spending habits.

• January retail sales saw the biggest monthly decline in a year, shocking analysts and signaling potential trouble ahead.
• Fast-fashion giant Forever 21 filed for bankruptcy over the weekend, marking its second financial collapse.
• Consumers and businesses continue to report declining confidence amid ongoing tariff uncertainties and policy shifts.

Federal Reserve Faces a Tough Decision

The Federal Reserve is set to meet this week to discuss interest rates, but ongoing economic turbulence has made its job more difficult.

• Inflation showed improvement last month but remains high, with tariffs potentially pushing it even higher.
• Government spending cuts and job losses have eroded consumer and business confidence.
• The Fed is expected to keep interest rates unchanged, but future decisions could become more complicated if unemployment rises.

Global Markets Respond

Despite U.S. market struggles, European and Asian markets showed mixed reactions to the economic outlook.

Europe:

• Germany’s DAX: Up 0.3%
• France’s CAC 40: Up 0.3%
• UK’s FTSE 100: Up 0.1%

Asia:

• China’s Industrial Output: Grew nearly 6% in the first two months of the year.
• Retail Sales in China: Increased 4%, but the property market continues to decline.
• Hong Kong’s Hang Seng: Up 0.8% to 21,144.86
• Shanghai Composite: Up 0.2% to 3,426.13
• Tokyo’s Nikkei 225: Up 0.9% to 37,396.52
• Seoul’s Kospi: Up 1.7% to 2,610.69
• Australia’s S&P/ASX 200: Up 0.8% to 7,854.10
• Taiwan’s Taiex: Up 0.7%
• Bangkok’s SET: Up slightly less than 0.1%

Looking Ahead

As April 2 approaches, all eyes will be on how the market reacts to the next round of tariffs and whether the Federal Reserve adjusts its strategy in response to economic shifts. Investors will also closely monitor consumer sentiment and corporate earnings reports in the coming weeks.

Source: AP News – Stock market today: US futures slip after Trump vows to push ahead with tariff hikes

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