Bond yields at multidecade highs, sticky inflation, the seventh month of the Iran war and AI-related worries drove the drop, with survey comments showing rising concern over oil, gas and broader living costs.
AAA data showed gasoline averaged $4.45 on Tuesday versus $3.13 a year earlier, reinforcing the price pressure households said was weighing on their economic outlook.
The present situation index slid to 109.3 from 117.2, while expectations fell to 63.6 from 69.5; consumers turned negative on current business conditions for the first time since September 2024 and expected weaker labor markets ahead.