U.S. Stocks Fall Sharply as Consumer Sentiment Sours in March

Summary

WSJ What’s News Episode Summary Episode: U.S. Stocks Fall Sharply as Consumer Sentiment Sours in March Release Date: March 28, 2025

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Market Overview: Sharp Decline in U.S. Stocks

Timestamp: 00:53 - 03:08

In today’s episode of WSJ What’s News, host Alex Osila begins by highlighting a significant downturn in the U.S. stock market. Following reports of declining consumer sentiment and higher-than-expected inflation, major indices closed lower:

• Dow Jones Industrial Average: Fell over 700 points (~1.7%)
• S&P 500: Dropped approximately 2% for the week
• NASDAQ: Decreased by 2.7% for the fifth time in six weeks

Osila states, “US Stocks sold off today after reports of lower consumer sentiment, hotter than expected inflation, and anticipation of Trump's announcement of further tariffs next week” (00:53).

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Consumer Sentiment and Economic Indicators

Timestamp: 03:09 - 04:35

The episode delves into the deteriorating consumer sentiment as reported by the University of Michigan's monthly survey. The headline index plummeted to 57, the lowest since 2022, down from 64.7 in February. Additionally, two-thirds of consumers anticipate higher unemployment in the next year—the highest since 2009.

Economics reporter Justin Lehart explains the underlying causes:

“A lot of it is just the headlines that you've been seeing. Tariffs, government layoffs, spending cuts, maybe immigration restrictions.” (03:09)

Lehart emphasizes that these sentiment measures capture on-the-ground realities not yet reflected in broader economic data. He mentions ongoing monitoring of spending reports and sales data to determine if the pessimism translates into reduced consumer behavior.

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CoreWeave’s Tumultuous IPO

Timestamp: 04:35 - 07:24

The podcast transitions to discuss the rocky debut of CoreWeave, an AI startup specializing in renting access to Nvidia chips. Anticipated as one of the year's standout IPOs, CoreWeave underperformed by pricing its shares below expectations and ultimately closing flat.

Finance reporter Corey Driebush provides insights:

“A lot went wrong. It just ends up being a question of timing when it comes to IPOs.” (05:02)

Driebush points out that the initial enthusiasm for AI-related stocks has cooled over the past year. Additionally, investor skepticism about the sustainability of the AI boom contributed to the subdued performance. He remarks:

“Investors said, no, we don't really want to pay that much. And they also had concerns about the sustainability of the AI boom.” (05:30)

The episode also notes that CoreWeave's struggles mirror broader challenges faced by other high-profile IPOs this year, such as Venture Global and CellPoint, leading some companies to reconsider their listing strategies.

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International Crisis: Earthquakes in Myanmar and Thailand

Timestamp: 07:24 - 08:01

Osila briefly covers the devastating earthquakes that struck Myanmar and Thailand, resulting in significant casualties:

• Myanmar: 144 confirmed dead, over 700 injured
• Thailand: At least three fatalities and numerous injuries from a collapsed high-rise building in Bangkok

These events underscore the global instability impacting markets and economies.

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President Trump’s Sweeping Deregulatory Agenda

Timestamp: 08:24 - 11:50

A major segment focuses on President Trump's aggressive deregulation efforts, particularly targeting the Environmental Protection Agency (EPA). The administration announced 31 actions aimed at rolling back U.S. environmental policies, affecting sectors such as power plants, oil and gas, electric vehicles, and wastewater management.

Scott Patterson, who covers the Trump Administration, provides detailed analysis:

“...this is probably the most sweeping deregulatory effort in modern times.” (09:06)

“Tariffs, inflation, interest rates, it's immediate... whereas tariffs... inflation... interest rates, it's immediate, it's right now. And that's what investors are reacting to.” (10:03)

Patterson explains that while deregulation is broadly supported by businesses seeking reduced red tape, the introduction of tariffs has created uncertainty and increased costs across various industries. Specifically, the oil and gas sector, initially supportive of Trump's election, faces rising expenses due to tariffs on essential equipment. This juxtaposition has led to mixed investor sentiments, with immediate concerns about tariffs overshadowing the long-term benefits of deregulation.

Furthermore, Patterson highlights the Federal Reserve's response, indicating potential sustained high-interest rates influenced by the administration's tariff policies. This economic environment poses significant challenges for investors, emphasizing the immediate impact of policy changes over the gradual effects of deregulation.

Osila concludes this segment by noting the complex landscape investors navigate amid deregulation promises and the tangible pressures of tariffs and inflation.

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Additional News Briefs

Timestamp: 11:50 - End

In the closing remarks, Osila touches on several key updates:

• Pardon of Trevor Milton: President Trump pardons Nikola founder Trevor Milton, convicted of fraud for misleading investors about his company's zero-emission trucks.

• Legal Actions Against the Trump Administration:

  • Law firms Jenner and Block, along with Wilmer Hale, file lawsuits in an attempt to block White House executive orders targeting them for their connections to lawyers involved in the 2016 election interference investigation.
  • Skadden law firm reaches a settlement to avoid targeting by the administration.

Osila promotes the WSJ’s "Bad Bets" podcast, which offers an in-depth exploration of Trevor Milton and Nikola's corporate downfall.

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Looking Ahead

Timestamp: End

The episode wraps up with a preview of upcoming content:

• Markets Wrap-Up: Scheduled for the next day.
• What's News Sunday: Featuring an analysis of President Trump's Liberation Day on April 2 and the effectiveness of new tariffs, providing insights into the administration's strategic approaches.

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Produced by: Pierre Bienname and Anthony Banci
Supervising Producer: Michael Cosmidis
Theme Music: Michael Lavalle
Development Producer: Aisha Al Muslim
Deputy Editors: Scott Salloway and Chris Zinsley
Head of News Audio: Falana Patterson

Thank you for listening to WSJ What’s News.

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This summary captures the essential discussions and insights from the episode, providing a comprehensive overview for listeners and non-listeners alike.

Transcript

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[Alex Osila]

US Stocks sell off after consumer sentiment sours in March. But will consumer behavior change? Plus CoreWeave stock market debut turns into a high profile stumble for both the AI industry and new public listings. And President Trump is following through on his pledge of sweeping deregulation.

[Scott Patterson]

Deregulation takes a while to work its way into the system, so you're not going to really see a benefit to companies from deregulation for a while. Whereas tariffs, inflation, interest rates, it's immediate. It's right now. And that's what investors are reacting to.

[Alex Osila]

It's Friday, March 28th. I'm Alex Osila for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. US Stocks sold off today after reports of lower consumer sentiment, hotter than expected inflation, and anticipation of Trump's announcement of further tariffs next week. Major US Indexes ended the day lower. The Dow fell more than 700 points, or about 1.7%. The S&P 500 dropped about 2% down for the week. For the fifth time in the last six weeks, the NASDAQ tumbled 2.7%. New data from the Commerce Department show that U.S. personal Income and consumption both rose in February. The Personal Consumption Expenditures Price Index, which the Fed uses to track inflation, rose 0.3% over the previous month and has climbed by 2.5% over the past 12 months, still above the Fed's 2% target. The core version of PCE inflation, excluding food and fuel, is up 2.8% over the past 12 months. That's an increase from January. Meanwhile, consumers took a gloomier view of the economy in March, according to the University of Michigan's monthly survey of consumer sentiment. The headline index came in at 57 this month. That's the lowest level since 2022 and a decline from 64.7 in February. Two thirds of consumers said that they expect higher unemployment in the next year, the Highest reading since 2009. The numbers are the latest sign that consumers are feeling less optimistic about the economy. But does that translate into actual changes in consumer behavior? Here to tell us more about what this means is economics reporter Justin lehart. Justin, what are some of the factors that are making consumers feel more negative about the economy.

[Justin Lehart]

A lot of it is just the headlines that you've been seeing. Tariffs, government layoffs, spending cuts, maybe immigration restrictions. You also have to consider with these measures of sentiment, they ask you, how are you doing? What are you seeing out there? So they can pick up things that maybe are happening on the ground that we're not seeing in the mean economic data as of yet.

[Alex Osila]

What kind of indicators do we look at to see if the sentiment turns into actual behavior?

[Justin Lehart]

We're going to be watching any kind of spending report, any kind of sales data. We definitely have seen some weakening in those measures this quarter so far. There was a decline in spending in January. People chalked that up to weather, to the Los Angeles fires. People thought, oh, you know, it's going to bounce back. It did bounce back a little bit in February, but not that much. So we've seen economists are marking down their forecasts of gross domestic product. Morgan Stanley, for example, they're at 0.4% growth for the first quarter. That's pretty weak. So these surveys may be telling you something about what's happening.

[Alex Osila]

That was WSJ economics reporter Justin Lehart. Thanks, Justin.

[Justin Lehart]

Thank you.

[Alex Osila]

It was supposed to be one of the splashiest IPOs of the year. Now Coreweave's stock market debut is turning into a high profile stumble. The startup that rents out access to Nvidia chips priced its initial public offering below expectations late yesterday and opened even lower today. In the end, its shares closed flat. Corey Driebush, who covers finance for the Journal, is here now to discuss. Corey, what went wrong for Core Weave?

[Corey Driebush]

A lot went wrong. It just ends up being a question of timing when it comes to IPOs. And often it's as simple as that. When you think about when a company started looking at an ipo, it's usually at least a year before they actually list their shares. A year ago, anyone with AI in their name, the stock was going up, up, up. And that sentiment has cooled a lot over these past 12 months.

[Alex Osila]

Markets are down today. Is this just bad luck for the company or does it say something broader about how other AI companies could potentially perform in the market?

[Corey Driebush]

Yes, and I know I started out by saying that just poor timing, but there are company specific issues and investors said, no, we don't really want to pay that much. And they also had concerns about the sustainability of the AI boom. And obviously companies right now are spending hundreds of billions of dollars on AI. But how sustainable is that?

[Alex Osila]

Just thinking more broadly about IPOs, I mean, this is not the first IPO this year that has not lived up to expectations. What does CoreWeave's IPO tell us about listings this year?

[Corey Driebush]

Obviously, every IPO is a little different, but in general, bankers had really hoped that 2025 was going to be this return to normal for the IPO market. Instead, we've seen Quite a few IPOs not do as well. And it's not all IPOs, but these are the bigger ones that have struggled. You think gas Exporter Venture Global in January, Another big IPO of the year was cybersecurity firm CellPoint, and that has also struggled since its IPO for its shares. And now there is Coreweave. So it's not that all IPOs are doing poorly, but when you see a few of the three biggest in the US not do so hot, it does cause some companies and their backers to maybe say, let's pause. Other companies are still in the pipeline, still waiting to go, but we're going to have to wait and see how that goes.

[Alex Osila]

That was WSJ finance reporter Corey Driebush. Thank you, Corey.

[Corey Driebush]

Thanks.

[Alex Osila]

And more on that series of powerful earthquakes that rocked Myanmar and Thailand that we told you about. In this morning's show, Myanmar authorities said that as Of Friday evening, 144 people were confirmed dead. More than 700 were injured and that the toll was expected to rise. Thai authorities said that at least three people were killed in Bangkok and dozens were injured when a high rise building collapsed at a construction site. Coming up, what investors make of President Trump's efforts at deregulation. That's after the break.

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[Alex Osila]

3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail] as he promised, President Trump is ushering in one of the most sweeping deregulatory drives in modern US History. Take the Environmental Protection Agency, which has so far seen the most aggressive plans for red tape rollback in a single day. The EPA announced 31 actions to deregulate U.S. environmental policies, including rules for power plants, the oil and gas industry, electric vehicles and wastewater. Scott Patterson, who covers the Trump Administration for the Journal joins me now. Scott, what are some of the industries affected by the president's deregulation efforts?

[Scott Patterson]

It probably would be shorter to say what industries aren't affected. The biggest ones are the chemical rolling back, oversight of toxic chemicals and the pollution that they can cause. Oil and gas, industry finance, banking. It's across the board, though. That's why, you know, we're saying that this is probably the most sweeping deregulatory effort in modern times, according to analysts and experts that we talked to. And it's also just beginning. A lot of what we're seeing right now are just promises and plans to roll back regulations. So that's something to keep in mind, is these things aren't always that easy to unwind these rules. They can take time.

[Alex Osila]

The Trump administration seems to be sending mixed signals here. On the one hand, this deregulation effort, which is welcomed by businesses, and on the other, introducing tariffs, which they're not so happy about. How are investors approaching this?

[Scott Patterson]

Yeah, after the election, stocks took off. Investors were, were very excited and happy. They thought that this would be great for profits for corporations. But then the inauguration happened and Trump started talking about tariffs and the stock market started tanking. That is really what has interrupted the animal spirits that, you know, people expected to see as a result of this deregulatory effort. Ironically, one of the places that seems to be most upset about tariffs is the oil and gas industry, which celebrated Trump's election. I was at a meeting in D.C. with oil and gas executives soon after the election, and I never saw so many smiling faces in my life. But now there seems to be a lot of anger about the tariffs in oil and gas industry because it's making their business more expensive. The stuff, the gear, the rigs that they use to drill is getting more expensive. Inflation, it's just across the board. The tariffs are going to make interest rates higher. We saw the Federal Reserve recently say that they're likely going to maintain high interest rates for the foreseeable future because of the Trump administration's tariff policy. That's a much bigger deal for investors than deregulation because it's immediate. Deregulation takes a while to work its way into the system. So you're not going to really see a big benefit to companies from deregulation for a while. Whereas tariffs, inflation, interest rates, it's immediate, it's right now. And that's what investors are reacting to.

[Alex Osila]

That was WSJ reporter Scott Patterson. Scott, thanks for being here.

[Scott Patterson]

Thank you.

[Alex Osila]

President Trump has pardoned Nikola, founder Trevor Milton, who has been convicted of fraud in federal court for what prosecutors said were his lies to investors about his zero emission trucks. If you want to hear more about Trevor Milton and Nikola's downfall, we did an entire season about it on our Bad Bets podcast. We'll leave a link in the show. Notes and Law firms Jenner and Block and Wilmer Hale filed separate lawsuits in a Washington, D.C. federal court today. They're an effort to block White House executive orders that targeted them for their ties to lawyers involved in an investigation into Russian interference in the 2016 election. The suits alleged that the administration engaged in unconstitutional retaliation that violates the First Amendment. Meanwhile, another law firm, Skadden, cut a deal to avoid being targeted by the Trump administration. And that's what's news for this week. Tomorrow you can look out for our weekly Markets wrap up, what's news in Markets then on Sunday, as President Trump's Liberation Day approaches on April 2, when the newest slate of tariffs kicks in, we're looking into the effectiveness of tariffs in the past and how this could help us understand the administration's strategies. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bienname and Anthony Banci, with supervising producer Michael Cosmidis. Michael Lavalle wrote our theme music, Aisha Al Muslim is our development producer, Scott Salloway and Chris Zinsley are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news News audio. I'm Alex Osola. Thanks for listening.