The U.S. stock market continues to experience significant volatility due to looming recession fears and the Federal Reserve's impending interest rate hike. This instability has been mirrored in a consistent three-month decline in consumer sentiment, raising concerns over the health of the economy. As a result, investors are turning their attention towards defensive sector stocks such as PepsiCo (NASDAQ:PEP), Inc., The J. M. Smucker Company, The Procter & Gamble Company (NYSE:PG), and Lamb Weston Holdings (NYSE:LW), Inc.
The preliminary consumer sentiment reading for October stood at 63, falling short of the anticipated 67.4. Indices that measure current conditions and future outlook have plummeted to their lowest point since May of this year. Inflation expectations for the coming year have risen to 3.8%, while long-term projections sit at 3%.
Despite robust U.S GDP growth of 4.9% in the third quarter, surpassing the forecasted 4.7%, market indexes have continued on a downward trend due to persistently high inflation rates. This growth in GDP signifies a strong economic performance, however, the sustained high inflation continues to weigh heavily on investor sentiment and market performance.
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