The University of Michigan's preliminary consumer sentiment index fell to a record low of 47.6 in April. This reading marks a sharp decline from the 53.3 level reported in March. The sentiment drop occurred across all demographic groups.
Consumers identified high prices, the Iran conflict, and weaker asset values as major concerns. One-year expected business conditions plunged in the latest report. High prices also caused buying conditions for durable goods and vehicles to deteriorate.
Year-ahead inflation expectations surged from 3.8% to 4.8%. This move represents the largest monthly increase since April 2025. The negative outlook signals potential spending cuts for retailers and service providers within the XLY ETF.