Just this Friday morning, the initial findings from the University of Michigan’s consumer sentiment survey took a toll on the stock market. The report painted a mixed picture for the start of January, showing little change in overall consumer confidence. However, what really caught everyone’s attention was the shift in consumers’ inflation expectations for the year, which shot up from 2.8% to 3.3%.
The stock market has been under some pressure lately. This fresh set of strong economic data has nudged Treasury yields higher, with the 30-year briefly touching the 5% mark—a level we hadn’t seen since early 2023.
Let’s take a quick look at how stocks have been performing in response:
The S&P 500 saw a decline of 100 points, translating to a 1.7% drop, landing at 5,815. The Dow wasn’t far behind, falling 600 points or 1.4%, standing at 42,038. Meanwhile, the Nasdaq Composite took the hardest hit, dropping 454 points, or 2.3%, to rest at 19,025.
Overall, these movements reflect the market’s struggle to adjust to the new data and the renewed concerns about rising inflation.
