Report: 65% of middle class struggling financially
In an Urban Institute poll commissioned by the National True Cost of Living Coalition, 65% of American families making at least $60k a year struggle financially
Cheddar
U.S. stocks opened slightly higher Wednesday with concerns about the effects of President Donald Trump’s tariffs on the broader economy squarely in focus.
The broad S&P 500 was up 3 points to trade around 5,781 at the open. The Dow added 13 points to 42,534, and the tech-focused Nasdaq Composite was 35 points higher, near 18,319.
Stocks closed at the lowest level since the November presidential election on Tuesday as investors fretted about an escalating trade war. Trump’s tariffs: 25% on Mexican and Canadian goods and an additional 10% tax on Chinese goods, bringing the total tariff to 20%, went into effect.
On Tuesday night, the president told Congress that despite the immediate economic pain, he remained committed to his tariff strategy.
“We’ve been ripped off for decades by nearly every country on Earth, and we will not let that happen any longer,” Trump said.
On Wednesday, a report from payroll provider ADP showed private sector employers added just 77,000 jobs in February, well below the consensus of 140,000, and the lowest since July.
“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” ADP noted in a release. “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”
Corporate earnings reinforce some of that hesitancy. On Tuesday, retailer Target told analysts to expect a “meaningful” decline in profits in the first quarter due to “ongoing consumer uncertainty,” soft sales in February and concerns around tariffs. And Best Buy warned its prices would rise in 2025 because Mexico and China are the company’s top two supply-chain suppliers.
Yields on U.S. government bonds have tumbled in recent weeks as investors increasingly price in a softening economy. The 10-year note started trading Wednesday at about 4.21%, down nearly 40 basis points since the start of the year.
Still, some analysts remain optimistic.
“Despite the recent selloff, there are several reasons to remain positive on U.S. stocks,” wrote Nicholas Colas, co-founder of DataTrek Research, in a note out Wednesday morning.
“Oil prices are dropping, and it’s hard to have a recession when energy prices decline,” Colas continued. “Long term yields are also moving lower, reducing the cost of debt financing. The dollar is weakening, a positive sign about global investor sentiment. Rate cut expectations are rising, a useful counterweight to a slower economy. Lastly, U.S. equities have not seen unusually high volatility. While we expect markets to remain choppy this month, we remain positive on U.S. large caps.”
