The Morning Edge: US Consumer Confidence Lowest Since 2021

India’s exposure to US trade risks is lower than that of other Asia-Pacific economies, though sectors like food, textiles, and pharmaceuticals remain vulnerable, Moody’s Ratings said on Tuesday. Most Indian firms in its rated portfolio are domestically focused, limiting direct risks from US policies. Meanwhile, India and the US are negotiating lower import tariffs, greater market access for US farm goods, and higher energy purchases, aiming for a trade deal by fall 2025. Across APAC, developing economies like India, Vietnam, and Thailand face steep rate differentials with the US. Electronics, motor vehicles, food, and textiles are among the most exposed sectors. Moody’s warned that emerging markets reliant on export-led growth will struggle in an increasingly protectionist global trade environment.

Data

US consumer confidence fell sharply in February, dropping 7 points to 98.3—its steepest decline since August 2021 and the lowest since June 2024—as concerns over President Donald Trump’s policies grew. The Conference Board’s survey, which closed on February 19, showed broad-based declines across age and income groups, with import tariffs a key worry. This marks the third consecutive monthly drop, reflecting rising unease over inflation and policy uncertainty.

Markets
Overnight

US stocks struggled on Tuesday, with the S&P 500 and Nasdaq hitting one-month lows amid a sharp drop in consumer confidence, which fell to its lowest level since August 2021. The S&P 500 and Nasdaq logged their fourth straight day of losses, while the Dow managed a modest gain, as concerns over economic uncertainty weighed on sentiment. Nvidia slid 2.8% ahead of its earnings report, dragging the semiconductor index down 2.3%.  Zoom Communications dropped 8.5% on a weak revenue forecast and cryptocurrency-linked stocks like Coinbase and MicroStrategy tumbled 6.4% and 11.4%, respectively. The selloff highlighted growing investor caution as markets await key earnings and economic updates.

US Treasury yields fell on Tuesday as signs of softening US growth and uncertainty over Trump administration policies weighed on markets. President Donald Trump’s planned tariffs on imports risk stoking domestic inflation, while his mass firings of government employees could disrupt the labour market, complicating the Federal Reserve’s ability to cut interest rates. Treasury Secretary Scott Bessent highlighted underlying economic fragility, pointing to interest rate volatility, sticky inflation, and government-focused job growth as key concerns. The 10-year yield dropped 9.5 basis points to 4.298%.

The US dollar extended its decline on Tuesday, pressured by a sharp drop in US consumer confidence and falling Treasury yields, while optimism over potential fiscal stimulus in Germany boosted the euro. The Conference Board’s consumer confidence index fell 7 points to 98.3, well below the 102.5 estimate, signalling growing economic uncertainty. The dollar index fell 0.39% to 106.33, nearing a two-month low, while the euro rose 0.37% to $1.0505, supported by hopes of increased spending in Europe.

Brent crude Oil prices dropped to a two-month low on Tuesday as weak economic data from the US and Germany fuelled concerns about slowing global demand. Rising tensions between the US and Europe over Ukraine, including disagreements on brokering a ceasefire with Russia three years after its invasion, added to market uncertainty. Brent crude futures fell 2.4%, to settle at $73.02 a barrel, reflecting growing fears of a demand slowdown amid geopolitical and economic headwinds.

Day’s Ledger

Economy

• Germany February GFK Consumer Climate Survey
• US January New Residential Sales Data

Companies

• Emami Realty board meets to consider fund raising plan
• Utkarsh Small Finance Bank board meets to consider fund raising plan

Policy

• US Securities and Exchange Commission Open Meeting
• Bank of England Monetary Policy Committee Member Swati Dhingra Speaks
• US Federal Reserve Bank of Richmond Thomas Barkin Speaks

Tickers

• ADANI GREEN ENERGY arm wins 1,250 MW pumped hydro storage project from Uttar Pradesh Power Corp
• AXIS BANK plans to sell NBFC business for up to $1 billion
• COFORGE board to consider stock split on March 4
• KPI GREEN signs MoU with Madhya Pradesh government to develop 1.8 GW renewable projects
• RAILTEL Corporation bags ₹1.11 billion signalling and telecom contract from South Central Railway
• TATA POWER signs MoU to develop 5,000 MW renewable projects in Assam with ₹300 bilion investment
• TATA STEEL infuses ₹107.27 billion into T Steel Holdings for debt repayment, UK restructuring
• ULTRATECH CEMENT to enter wires and cables segment, announces share swap ratio for acquisition of Kesoram Industries

Must Read

• Axis Bank is said to weigh majority stake sale of $1 billion shadow bank unit
• RBI eases capital requirements for banks, boosting credit flow to NBFCs and MFIs
• Reliance to invest ₹500 billion in Assam over next 5 years: Mukesh Ambani
• Centre readies plan to sell up to 20% in five public-sector banks
• India’s oil imports from Russia rise 8% to hit 49 billion euros
• India could extend import curbs on steelmaking raw material, sources say
• UltraTech Cement to enter wires and cables segment
• Ukraine to Agree With US on Terms for Minerals Deal
• Bitcoin Slides Below $90,000 as Crypto Selloff Gathers Steam

Daily Mantra

Never stop fighting until you arrive at your destined place - that is, the unique you. Have an aim in life, continuously acquire knowledge, work hard, and have perseverance to realise the great life. -  A. P. J. Abdul Kalam