By Jamie McGeever

ORLANDO, Florida, March 25 (Reuters) - TRADING DAY

Making sense of the forces driving global markets

By Jamie McGeever, Markets Columnist

U.S. consumer confidence sinks

What started out as a positive day for world stocks on Tuesday fizzled as the U.S. session progressed, after another steep plunge in U.S. consumer confidence reminded investors of the challenges facing the world's largest economy.

The MSCI All Country global index hit a near-three week high before easing back when Wall Street got up and running. Perhaps the big surprise was that resilience in tech stocks meant the three main U.S. indices closed the day higher and shrugged off the growing mismatch between the rosy earnings outlook and darkening economic horizon.

I'd love to hear from you, so please reach out to me with comments at jamie.mcgeever@thomsonreuters.com. You can also follow me at [@ReutersJamie and @reutersjamie.bsky.social.]

Today's Key Market Moves

• The Nasdaq's 0.5% gain lifts Wall Street, as equity investors show more optimism than others that President Trump may relent on tariffs. Consumer cyclicals and tech lead the way.

• The dollar dips vs G10 currencies, especially against the yen, while gold gains 0.3% to close above $3,000 an ounce for a seventh day.

• U.S. bond yields dip, led by the short-end. Weak consumer confidence and a well-received $69 billion auction of 2-year notes turns a mild bear-steepening to a mild bull-steepening later in the day.

• Oil hits a three-week high before ending lower on the Russia-Ukraine 'sea and energy' truce covering the Black Sea and energy infrastructure. This snaps a four-day winning streak.

• Turkish markets cheer pledges from the finance minister and central bank governor to do whatever it takes to tame the current market turmoil. Stocks claw back 4.5% and the lira steadies at just under 38 per dollar.

• Hong Kong-listed Chinese tech shares slide 3.8% to a three-week low as Xiaomi's planned share sale sparks valuation concerns. The Hang Seng tech index is down 10% in the last week.

Another vote of consumer no confidence

First the University of Michigan, now the Conference Board.

Two of America's most closely-watched consumer surveys show that consumers, who account for 70% of all economic activity, are spooked by President Donald Trump's tariff agenda.

The Conference Board survey published on Tuesday showed that confidence has fallen to the lowest in four years and the expectations index is at a 12-year low, breaching a level associated with an economic downturn.

It doesn't bode well for growth and, ultimately, corporate profits - more on that below. The tariff situation is extremely fluid as Trump's April 2 deadline for a whole raft of new duties draws closer, and on Tuesday Europe's top trade official was due to meet with Trump's top trade officials for talks.

Trade tensions and tariff fears are also likely to figure heavily in British finance minister Rachel Reeves' half-year update on the public finances on Wednesday, a budget statement that could see her slash her growth forecasts.

As the latest Conference Board survey shows, tariffs are clearly weighing on U.S. consumer confidence, although less so on the U.S. earnings outlook. That might be about to change though.

Rosy U.S. earnings vista doesn't match gloomy growth outlook

U.S. economic growth is set to slow this year, perhaps significantly, but no one seems to have told Wall Street. While equity prices and valuations have tailed off recently, analysts are still expecting record-high profits.

In some ways, this is how it should work. Shifts in the economic, political, regulatory or financial environment that affect corporate profitability should be reflected in the stock market well before analysts adjust their longer-term outlooks.

And a re-rating of sorts has already played out. U.S. equity valuations have come off their historic peaks, as the S&P 500 has flirted with a 10% reversal from its record high and the Nasdaq has waded deeper into correction territory. Earnings growth is expected to slow modestly this year.

But profits, which are already at record-high levels, are still expected to keep rising fairly quickly despite the increasingly dour economic growth forecasts. The S&P 500 weighted average earnings per share estimate for 2025 is a record high $269.91, representing growth of around 10% from last year, according to LSEG I/B/E/S. The calendar year 2026 estimate assumes there will be an additional 14% rise.

This suggests the re-rating hasn't gone far enough.

To read more, click here .

What could move markets tomorrow?

• Australia CPI inflation (February)

• Japan service sector PPI inflation (February)

• Singapore industrial production (February)

• Indonesian central bank chief Abdul Rasheed Ghaffour speaks

• UK inflation (February)

• UK finance minister Rachel Reeves delivers spring budget update

• France consumer confidence (March)

• Brazil current account, FDI (February)

• U.S. durable goods orders (February)

• U.S. 5-year Treasury bond auction

• Minneapolis Fed President Neel Kashkari speaks

• St. Louis Fed President Alberto Musalem speaks

If you have more time to read today, here are a few articles I recommend to help you make sense of what happened in markets today.

1. Trump policy swerves spur Europe into action, but any 'Europhoria' may be premature

2. UK finance minister Reeves says she will stick to fiscal rules despite global turmoil

3. US bond investors weigh 'convexity' risk in recent Treasury yield decline

4. Turkey's Simsek seeks to calm investors, says market strains will be managed, sources say

5. China equity issuance doubles as tech race draws back global investors

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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(By Jamie McGeever, editing by Nia Williams)

((jamie.mcgeever@thomsonreuters.com; Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net/))