(NEW YORK) — Oil prices fell and stocks closed higher on Monday, indicating optimism among investors about the limits of economic fallout from the ongoing Israel-Iran conflict.
The Dow Jones Industrial Average closed up 317 points, or 0.7%, erasing much of the losses suffered on Friday as back-and-forth strikes broke out between the two countries.
The S&P 500 climbed 0.9% on Monday, while the tech-heavy Nasdaq jumped 1.5%. In each case, the gains erased nearly all of the losses suffered as the conflict began days earlier.
Oil prices, meanwhile, ticked slightly lower on Monday, easing a surge in prices set off late last week as investors feared a wider regional war in the oil-rich Middle East.
The U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices — dropped 2.3% on Monday. Brent crude future prices, another top measure of oil prices, also fell about 1.8%. Each index had climbed as much as 10% in the immediate aftermath of the conflict.
Aerial attacks between Israel and Iran continued overnight into Monday, marking a fourth day of strikes following Israel’s Friday attack. That surprise operation hit at the heart of Iran’s nuclear program, striking key facilities and killing several nuclear scientists as well as high-ranking military leaders, according to Israeli officials.
The U.S. did not provide any military assistance or have any involvement in Israel’s Friday strikes, a U.S. official told ABC News. President Donald Trump told ABC News on Sunday, “It’s possible we could get involved.” The U.S. did provide assistance in shooting down incoming missile and drone attacks from Iran in response to Israel’s initial barrage, officials said.
The drop in oil prices may ease a potential uptick in the price of gasoline for U.S. drivers.
Since crude oil makes up the top ingredient in car fuel, the Israel-Iran conflict threatened to modestly increase prices over the coming days and significantly hike them in the event of a wider war, experts previously told ABC News.
“By later this week, we’ll likely see nearly all states with price increases as retail gas prices rise following Iran/Israel attacks,” Patrick de Haan, the head of petroleum analysis at GasBuddy, said on Monday in a post on X.
The move higher for U.S. stocks mirrored gains in markets across Asia and Europe. The STOXX Europe 600 index ticked up 0.3% by mid-afternoon local time. In Japan, the Nikkei 225 in Tokyo climbed 1.2% on Monday.
ABC News’ David Brennan contributed to this report.
Jabin Botsford/The Washington Post via Getty Images
(NEW YORK) — The Trump Organization on Monday announced a mobile phone service and a Trump-branded smartphone, extending the family real estate company into the vast U.S. telecom market.
The announcement arrives exactly 10 years after the launch of President Donald Trump’s first presidential campaign, and it features a monthly mobile plan priced at $47.45, an apparent reference to Trump’s résumé as the nation’s 45th and 47th president.
“I’m incredibly excited to step into this new digital space, hard-working Americans deserve a wireless service that’s affordable, reflects their values, and delivers reliable quality they can count on,” Eric Trump, executive vice president of the Trump Organization, said in a statement on Monday.
Trump Mobile follows a long line of various products featuring the Trump family name that President Trump and his family have promoted, including the Trump meme coin, Trump sneakers and Trump guitars.
Here’s what to know about Trump Mobile:
What products does Trump Mobile offer?
Trump Mobile offers both a cellular plan and a smartphone.
The company provides 5G service through what it calls “The 47 Plan.” Under the service, customers will access the “same coverage as the 3 nationwide phone service carriers,” Trump Mobile says on its website. The three top U.S. wireless carriers are Verizon, T-Mobile and AT&T.
Trump Mobile boasts customer perks such as unlimited talk, text and data; roadside assistance; telehealth services; and free international calling to more than 100 countries. The unlimited texting may be subject to data limits, the company’s website says.
The company also sells a smartphone, which it calls, “The T1 Phone.”
The gold-colored phone features a built-in camera and 256 gigabyte storage. An American flag and “T1” are inscribed on the back of the phone, according to an image on the company’s website.
What are the prices and release dates of Trump Mobile products?
The company’s cellular service is priced at $47.45 per month. The company’s website says the cellular service is available now.
The Trump Mobile smartphone will cost $499, including a $100 down payment. The smartphone will be released in August, Trump Mobile said on Monday.
Who will lead Trump Mobile?
On Monday, the Trump Organization announced the cellular offerings as a joint venture led by Donald Trump’s sons, Eric Trump and Donald Trump Jr., as well as staff at the newly formed Trump Mobile.
“Trump Mobile is going to change the game, we’re building on the movement to put America first, and we will deliver the highest levels of quality and service. Our company is based right here in the United States because we know it’s what our customers want and deserve,” an executive vice president at The Trump Organization told ABC News.
(NEW YORK) — Oil prices fell and stocks climbed in early trading on Monday, indicating optimism among investors about the limits of economic fallout from the ongoing Israel-Iran conflict.
The Dow Jones Industrial Average surged 415 points, or 1%, erasing much of the losses suffered on Friday as back-and-forth strikes broke out between the two countries.
The S&P 500 climbed 1% early Monday, while the tech-heavy Nasdaq jumped 1.3%. In each case, the gains erased nearly all of the losses suffered as the conflict began days earlier.
Oil prices, meanwhile, ticked slightly lower on Monday, easing a surge in prices set off late last week as investors feared a wider regional war in the oil-rich Middle East.
The U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices — dropped 4% on Monday. Brent crude future prices, another top measure of oil prices, also fell about 4%. Each index had climbed as much as 10% in the immediate aftermath of the conflict.
Aerial attacks between Israel and Iran continued overnight into Monday, marking a fourth day of strikes following Israel’s Friday attack. That surprise operation hit at the heart of Iran’s nuclear program, striking key facilities and killing several nuclear scientists as well as high-ranking military leaders, according to Israeli officials.
The U.S. did not provide any military assistance or have any involvement in Israel’s Friday strikes, a U.S. official told ABC News. President Donald Trump told ABC News on Sunday, “It’s possible we could get involved.” The U.S. did provide assistance in shooting down incoming missile and drone attacks from Iran in response to Israel’s initial barrage, officials said.
The drop in oil prices may ease a potential uptick in the price of gasoline for U.S. drivers.
Since crude oil makes up the top ingredient in car fuel, the Israel-Iran conflict threatened to modestly increase prices over the coming days and significantly hike them in the event of a wider war, experts previously told ABC News.
“By later this week, we’ll likely see nearly all states with price increases as retail gas prices rise following Iran/Israel attacks,” Patrick de Haan, the head of petroleum analysis at GasBuddy, said on Monday in a post on X.
The move higher for U.S. stocks mirrored gains in markets across Asia and Europe. The STOXX Europe 600 index ticked up 0.3% by mid-afternoon local time. In Japan, the Nikkei 225 in Tokyo climbed 1.2% on Monday.
ABC News’ David Brennan contributed to this report.
(NEW YORK) — Oil prices surged and stocks slumped on Friday morning in the immediate hours after Israel began an attack on Iran targeting nuclear sites and senior military officers.
The strike stoked concern among investors about a possible wider conflict across the Middle East, which accounts for a large share of global oil production.
The U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices — surged more than 7% on Friday. Brent crude future prices, another top measure of oil prices, also climbed more than 7%.
Stocks, meanwhile, tumbled in early trading on Friday as the ultimate outcome of the Israel-Iran conflict remained unclear.
The Dow Jones Industrial Average fell 575 points, or 1.3%, at the close of trading. The S&P 500 declined 0.8%, while the tech-heavy index slid 0.9%.
The jump in oil prices threatens to raise the price of gasoline for U.S. drivers, since crude oil makes up the top ingredient in car fuel.
Gas prices “will likely start to rise across much of the country later this evening in response to Israel’s attacks on Iran, which have caused oil prices to surge,” Patrick de Haan, the head of petroleum analysis at GasBuddy, said on Friday in a post on X.
A typical gallon of gas could tick up between 10 and 25 cents, de Haan added. The average price of a gallon of gas currently stands at $3.13, AAA data shows. The price increase anticipated by de Haan would amount to a hike of as much as nearly 8%.
“For now, I expect the rise to be noticeable, but limited,” de Haan said. “This could change.”
Israel launched dozens of strikes against Iran early Friday morning local time, striking at the heart of the country’s nuclear program, killing several nuclear scientists as well as high-ranking military leaders, according to Israeli officials.
Iran responded with an aerial attack involving about 100 drones, Israel said, but all of them were shot down before hitting their target.
The move downward for U.S. stocks followed losses in markets across Asia and Europe. The STOXX Europe 600 index fell about 1% by late afternoon local time. In Japan, the Nikkei 225 in Tokyo dropped 0.8% on Friday.
ABC News’ Riley Hoffman, Leah Sarnoff, Jack Moore, Jon Haworth, and Nadine El-Bawab contributed to this report.
(WASHINGTON) — The U.S. Consumer Price Index released on Wednesday showed May inflation ticking slightly higher, rising 2.4%, in line with expectations.
The report amounted to the latest test for President Donald Trump’s tariffs as some retailers and economists warn the policy will raise prices.
So far, the economy has defied fears of price hikes, instead giving way to a cooldown of inflation over the months since Trump took office.
Economists expect inflation to have jumped slightly in May, registering year-over-year price increases of 2.4%. That would mark an increase from an inflation rate of 2.3% over the year ending in April, which amounted to the lowest inflation level since 2021.
The small increase in inflation anticipated by economists would keep price levels near the Federal Reserve’s target rate of 2%, putting them well below a recent peak of 9% in 2022. In recent weeks, Trump has dialed back some of his steepest tariffs, easing the costs imposed upon importers. Such companies typically pass along a share of the higher tax burden in the form of price hikes.
A trade agreement between the U.S. and China in May slashed tit-for-tat tariffs between the world’s two largest economies and triggered a surge in the stock market. Within days, Wall Street firms softened their forecasts of a downturn.
The U.S.-China accord came weeks after the White House paused a large swath of Trump’s “Liberation Day” tariffs targeting dozens of countries. Trump also eased sector-specific tariffs targeting autos and rolled back duties on some goods from Mexico and Canada.
Still, an across-the-board 10% tariff applies to nearly all imports, except for semiconductors, pharmaceuticals and some other items. Those tariffs stand in legal limbo, however, after a pair of federal court rulings late last month.
Tariffs remain in place for steel, aluminum and autos, as well as some goods from Canada and Mexico.
Warning signs point to the possibility of elevated prices over the coming months.
Nationwide retailers like Walmart and Best Buy have voiced alarm about the possibility they may raise prices as a result of the levies.
The Organization for Economic Co-operation and Development, or OECD, said this month it expects U.S. inflation to reach 4% by the end of 2025, which would mark a sharp increase from current levels.
Federal Chair Jerome Powell, in recent months, has warned about the possibility that tariffs may cause what economists call “stagflation,” which is when inflation rises and the economy slows.
Stagflation could put the central bank in a difficult position. If the Fed were to raise interest rates, it could help ease inflation, but it may risk an economic downturn. If the Fed were to cut rates in an effort to spur economic growth, the move could unleash faster price increases.
For now, the Fed appears willing to take a wait-and-see approach. At its last meeting, in May, the Fed opted to hold interest rates steady for the second consecutive time.
“For now, it does seem like a fairly clear decision for us to wait and see,” Powell said at a press conference in Washington, D.C., last month.
The Fed will announce its next rate decision on June 18. Investors peg the chances of a decision to leave rates unchanged at 99.9%, according to the CME FedWatch Tool, a measure of market sentiment.
Stanislav Kogiku/SOPA Images/LightRocket via Getty Images
(LONDON) — The Nintendo Switch 2 is off to a turbo-charged start, thanks to a little help from Mario and his friends in Mario Kart World, smashing its own sales record by becoming the fastest selling Nintendo game system ever with more than 3.5 million units sold in just four days.
Nintendo sold an estimated 2.7 million units of the original Nintendo Switch in its first month when it launched in March 2017, but have now managed to move over 3.5 million units in just 96 hours, an almost 30% increase in sales in a much shorter period, the company said.
The Japanese company released the latest sales numbers on Wednesday and are aiming to sell 15 million units by March next year, putting them on track to meet or exceed expectations in the coming weeks and months. “Fans around the world are showing their enthusiasm for Nintendo Switch 2 as an upgraded way to play at home and on the go,” said Nintendo of America President and Chief Operating Officer Doug Bowser. “We are thankful for their response and happy to see the fun they are already having with Nintendo Switch 2 as they explore new features and games that bring friends and family together in new ways.”
The Nintendo Switch 2 is the next generation console for the company, its first new system release in eight years, and features a larger screen capable of full 1080p high-definition display, a faster processor that allows for enhanced graphics and performance, as well as redesigned magnetic Joy-Con 2 controllers with mouse functionality, Nintendo said. The system also debuts the new GameChat2 feature where players can voice or video chat and share game screens with friends online.
“You’ll probably see a first batch of people who can’t live without it,” van Dreunen said. “If you’re a die-hard [Switch] fan, it’s like standing in line for the new Harry Potter book or movie,” Joost van Dreunen, a professor at New York University’s Stern School of Business and writer of the SuperJoost Playlist, a games industry-focused newsletter, told ABC News last week.
“Nintendo is making a carefully calculated bet with the Switch 2 that will pay off,” van Dreunen continued. “While some might have hoped for a more revolutionary device, Nintendo’s evolutionary approach shows deep market understanding … The console’s focus on accessible and social gaming — rather than competing with Microsoft and Sony on technical specs — underscores Nintendo’s commitment to shared experiences for all ages.”
The Nintendo Switch 2 system launched alongside the first brand new Mario Kart game in 11 years called Mario Kart World, featuring an interconnected world where you can drive virtually anywhere with dynamic weather conditions, new game modes and up to 24 drivers at once — the most in the 33-year-old series history.
Nintendo is hoping to build a base, as well as excitement for its new system, ahead of next month’s launch of a new 3D platforming game starring Donkey Kong called Donkey Kong Bananza, which Nintendo says will let players “unleash their inner Kong as they smash and bash their way through a wild, mayhem-packed action adventure.”
After its global launch last Thursday, Nintendo Switch 2 is now available for the retail price of $449.99, and is also available as a bundle with a digital download of “Mario Kart World” for $499.99.
(WASHINGTON) — A fresh inflation report to be released on Wednesday will provide the latest test for President Donald Trump’s tariffs as some retailers and economists warn the policy will raise prices.
So far, the economy has defied fears of price hikes, instead giving way to a cooldown of inflation over the months since Trump took office.
Economists expect inflation to have jumped slightly in May, registering year-over-year price increases of 2.4%. That would mark an increase from an inflation rate of 2.3% over the year ending in April, which amounted to the lowest inflation level since 2021.
The small increase in inflation anticipated by economists would keep price levels near the Federal Reserve’s target rate of 2%, putting them well below a recent peak of 9% in 2022.
In recent weeks, Trump has dialed back some of his steepest tariffs, easing the costs imposed upon importers. Such companies typically pass along a share of the higher tax burden in the form of price hikes.
A trade agreement between the U.S. and China in May slashed tit-for-tat tariffs between the world’s two largest economies and triggered a surge in the stock market. Within days, Wall Street firms softened their forecasts of a downturn.
The U.S.-China accord came weeks after the White House paused a large swath of Trump’s “Liberation Day” tariffs targeting dozens of countries. Trump also eased sector-specific tariffs targeting autos and rolled back duties on some goods from Mexico and Canada.
Still, an across-the-board 10% tariff applies to nearly all imports, except for semiconductors, pharmaceuticals and some other items. Those tariffs stand in legal limbo, however, after a pair of federal court rulings late last month.
Tariffs remain in place for steel, aluminum and autos, as well as some goods from Canada and Mexico.
Warning signs point to the possibility of elevated prices over the coming months.
Nationwide retailers like Walmart and Best Buy have voiced alarm about the possibility they may raise prices as a result of the levies.
The Organization for Economic Co-operation and Development, or OECD, said this month it expects U.S. inflation to reach 4% by the end of 2025, which would mark a sharp increase from current levels.
Federal Chair Jerome Powell, in recent months, has warned about the possibility that tariffs may cause what economists call “stagflation,” which is when inflation rises and the economy slows.
Stagflation could put the central bank in a difficult position. If the Fed were to raise interest rates, it could help ease inflation, but it may risk an economic downturn. If the Fed were to cut rates in an effort to spur economic growth, the move could unleash faster price increases.
For now, the Fed appears willing to take a wait-and-see approach. At its last meeting, in May, the Fed opted to hold interest rates steady for the second consecutive time.
“For now, it does seem like a fairly clear decision for us to wait and see,” Powell said at a press conference in Washington, D.C., last month.
The Fed will announce its next rate decision on June 18. Investors peg the chances of a decision to leave rates unchanged at 99.9%, according to the CME FedWatch Tool, a measure of market sentiment.
(NEW YORK) — A feud between President Donald Trump and Tesla CEO Elon Musk hammered shares of the electric carmaker on Thursday, before a lull in the acrimony on Friday prompted a recovery of some losses.
Still, as of midday Friday, shares had dropped nearly 10%, wiping out tens of billions of dollars in company value.
The falling out between Trump and Musk raises serious concern for Tesla, threatening crucial regulatory approvals and government subsidies, while risking ire from conservative car buyers who may otherwise have eased sales woes suffered as liberals turned elsewhere, some industry analysts told ABC News.
The outcome remains unclear, however, leaving open the possibility the two sides may patch up the relationship or Tesla could navigate fraught ties with the White House, they added.
The feud “puts massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk in the Beltway,” Dan Ives, a managing director of equity research at the investment firm Wedbush and a longtime Tesla bull, said in a memo to clients on Friday.
The president and the world’s richest person volleyed tit-for-tat barbs on rival social media platforms Thursday in a public clash that Ives described as “one of the strangest Twilight Zone days we have seen.”
Tesla shares sank as much as 18% on Thursday, before closing down 14%. In early trading on Friday, Tesla climbed nearly 6% as tensions appeared to thaw.
Overall, the stock is down nearly a third from an all-time high in December, which resulted from a sharp rise after the election of Trump.
Tesla remains a top electric carmaker but the company faces growing competition, especially from Chinese firms such as BYD.
Tesla’s profits fell 71% over the first three months of this year, a company earnings release in April showed. The decline coincided with a sales slump at Tesla and came amid worldwide protests against Musk over his role in Trump’s administration.
As car sales slowed, Musk touted a future autonomous car service, dubbed robotaxis, as a growth area for the business. The company plans to roll out its robotaxi test program in Austin, Texas, later this month.
Trump could threaten those aspirations, however, if he pressures federal regulators to deny necessary approvals for the company’s autonomous driving program or renews investigations into the safety of the company’s full self-driving software, analysts said.
“If full self-driving were to be invalidated, that would be a huge hit to Tesla stock and to Musk,” Gordon Johnson, CEO and founder of data firm GLJ Research, who is bearish on Tesla, told ABC News.
Tesla also generates significant revenue from the sale of carbon emissions credits to other car manufacturers, which helps the firms comply with environmental standards set by a range of government entities.
Tesla earned nearly $2.8 billion last year on the collection of such government subsidies while incurring few costs in this area of its business, the firm said in its 2024 annual report.
In theory, Trump could seek to erode state-level emissions standards in a manner that alleviates much of the need for rival carmakers to purchase them. If California were to do away with its emissions credit system, it could cost Tesla roughly $2 billion, a JPMorgan report last month found.
“I can’t stress enough the risk of these credits going away,” Johnson said.
For now, the outcome of the fallout remains unknown and could prove minimal, some analysts told ABC News.
They pointed to the likelihood of at least partial reconciliation between Trump and Musk, who as recently as last week exchanged effusive praise in the Oval Office. All-out government attacks on Tesla would incite a prolonged, combative relationship, analysts said, which may not benefit either side.
The company still offers longstanding, affordable EV models and an extensive battery-charging network.
Observers who focus on the headlines and stock gyrations risk overstating Trump’s role in the fortunes of Tesla anyway, Seth Goldstein, an analyst at research firm Morningstar who studies the EV sector, told ABC News.
“While political fallout and potential retribution will move the stock, I don’t think this is as big an event as Tesla’s other events coming up this year,” Goldstein said, pointing to the robotaxi testing.
Ives, of Wedbush, voiced similar optimism about the possibility of moving past the feud.
“We believe cooler heads will prevail today and into the weekend,” Ives said. “Hopefully.”
(NEW YORK) — The U.S. trade deficit narrowed significantly in April as President Donald Trump sharply escalated tariffs before pausing a large swath of the levies, U.S. Commerce Department data on Thursday showed.
Trump touted the tariffs as an effort to slash the nation’s trade deficit, which the president has said he considers a threat to the nation’s economic prosperity. Many economists disagree, however, saying the trade deficit reflects the consumer-driven engine of the U.S. economy.
The trade gap fell by more than half in April as imports plunged, the data showed. The U.S. registered a trade deficit of about $61 billion in April, marking a sharp decline from a $140 billion trade gap a month earlier.
Imports dropped by 16% in April as some trade barriers took effect, the data showed. Imports had ticked upward a month earlier as some firms rushed to stockpile supply before the levies saddled them with additional costs.
The nation’s trade gap stands well below the $131 billion deficit recorded in January, the month Trump took office.
The outlook is murky for the Trump’s tariff policy and the wider economy.
Trump’s on-again, off-again approach to tariffs leaves in doubt their ultimate level. A pair of court rulings last week thrust Trump’s steepest tariffs into limbo, adding another layer of uncertainty as federal appeals court judges determine whether a significant number of the policies pass legal muster.
The uncertain policy environment facing businesses has coincided with an anxious moment for consumers. Consumer attitudes have soured for four consecutive months as tariffs have taken hold, according to a survey conducted by the University of Michigan.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper appetites diminish and import prices rise.
So far, key measures of the economy have largely defied fears of a downturn. The unemployment rate stands at a historically low level and job growth remains robust, though it has slowed from previous highs. In recent months, inflation has cooled, reaching its lowest level since 2021.
The Organization for Economic Co-operation and Development, or OECD, forecast on Tuesday continued growth for the U.S. economy in 2025 and 2026, albeit at a slower pace than last year. Additionally, recession forecasts on Wall Street faded in recent weeks after Trump rolled back some tariffs.
(NEW YORK) — Executives at major corporations, including Target, Goldman Sachs and Pepsi, have invoked the same one-word boogeyman on recent earnings calls: “Uncertainty.”
Concern among companies big and small about the unsteady business environment has centered on President Donald Trump’s tariff policies, which the White House has altered numerous times since Trump took office.
A pair of court rulings last week thrust Trump’s steepest tariffs into limbo, adding another layer of uncertainty as federal appeals court judges determine whether a major swath of the policies pass legal muster.
In response to the tariff shifts, many U.S. companies have opted to put hiring and investment plans on hold out of fear that a fresh levy could otherwise spark regret, experts told ABC News.
That paralysis risks sapping momentum from the economy and tipping the U.S. into a downturn, they added, while acknowledging the ultimate outcome remains unclear.
“These pretty significant policy changes – whether they’re coming out of the administration or the courts – can have a big financial impact on companies,” Gregory Brown, a finance professor at the University of North Carolina, told ABC News. “Profits can turn to losses, and vice versa.”
“It has to be nerve-racking for people on the front lines of this in terms of having their businesses or jobs highly affected,” Brown added.
The Trump administration has rebuked criticism of its on-again, off-again tariff approach, saying the flexibility affords White House officials leverage in trade negotiations with countries targeted by the levies.
Speaking to ABC News’ “This Week” in April, Treasury Secretary Scott Bessent described the posture as “strategic uncertainty.”
“You’re not going to tell the person on the other side of the negotiation where you’re going to end up. And nobody’s better at creating this leverage than President Trump,” Bessent said.
In the meantime, a host of major companies have warned that they may suffer losses due to the lack of clarity.
Target CEO Brian Cornell last month warned of “massive potential costs” due to tariffs, lamenting difficulties posed by “the rates we’re facing and the uncertainty about how these rates in different categories might evolve.”
In April, Goldman Sachs CEO David Solomon voiced alarm about possible damage that could result from the murky outlook.
“This uncertainty around the path forward and fears over the potentially escalating effects of the trade war have created material risks to the U.S. and global economy,” Solomon told analysts.
A survey of CEO confidence fell to its lowest level since 2022, the Conference Board found last month. More than half of CEOs expect conditions to worsen over the next six months, the survey said.
The policy uncertainty puts businesses in a bind because they cannot evaluate the costs and benefits of important long-term decisions, such as investment and hiring, Brett House, a professor of professional practice at Columbia University and former deputy chief economist at Scotiabank, told ABC News.
“Companies always have risks ahead of them. They can price those risks in terms of the cost of lending or borrowing and the prices of goods or services,” House said. “In a period of uncertainty, it’s hugely chilling of business activity because there’s almost now way to anticipate what the price of an activity should be.”
The uncertainty facing businesses has coincided with an anxious moment for consumers. Consumer attitudes have soured for four consecutive months as tariffs have taken hold, according to a survey conducted by the University of Michigan.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper appetites diminish. In theory, a slowdown of spending could hammer some companies at the same time they attempt to navigate the ever-shifting business environment, some experts said.
“If consumption starts coming down and companies are not investing, that’s when you start to see little parts of gross domestic product come down,” Jadrian Wooten, a professor of economics at Virginia Tech University, told ABC News. “We’re in that danger zone.”
The Federal Reserve Bank of St. Louis released a study in April that found a sudden surge of economic uncertainty could set the conditions for an economic recession.
So far, key measures of the economy have largely defied fears of a downturn.
The unemployment rate stands at a historically low level and job growth remains robust, though it has slowed from previous highs. In recent months, inflation has cooled, reaching its lowest level since 2021.
The Organization for Economic Co-operation and Development, or OECD, forecast on Tuesday continued growth for the U.S. economy in 2025 and 2026, albeit at a slower pace than last year. Recession forecasts on Wall Street faded in recent weeks after Trump rolled back some tariffs.
Brown, of the University of North Carolina, said the uncertainty facing businesses is unmistakable, but its precise economic effect remains to be seen.
“The uncertainty is real,” Brown said. “How much of it really comes to fruition and really shows up in the data — that’s a different question.”
