CNBC Daily Open: U.S. consumers' optimism wanes

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A poster displays reduction prices as customers visit Macy's Herald Square store on December 17, 2023 in New York City. 

Kena Betancur | Corbis News | Getty Images

This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today  

Wall Street retreats

U.S. stocks closed lower Tuesday as the market rally continued to cool. The S&P 500 fell for its third straight session, down 0.28%. The Nasdaq Composite lost 0.42% as tech stocks struggled, while the Dow slipped 0.08%. Despite the pullback, the major averages are on pace for their fifth straight winning month. 

Scramble over port shutdown

Logistics firms are left scrambling after the closure of the Port of Baltimore, one of the busiest ports in the U.S. Early Tuesday, the city's Francis Scott Key Bridge collapsed after a large container ship slammed into a bridge pillar — six people are presumed dead. "There will be dozens of diversions in the next week and hundreds in the coming months as long as Baltimore is shut down," said Richard Meade, editor-in-chief of the shipping journal Lloyd's List. 

Cocoa prices soar

Cocoa prices are surging and this could impact consumers as the world struggles with a supply deficit. The cocoa futures contract for May delivery rose to an all-time intraday high of $10,080 per metric ton Tuesday. "The worst is still yet to come," said Paul Joules, a commodities analyst at Rabobank, adding prices will stay high for some time as there are no easy solutions.

Apple's big reveal

Apple unveiled its big annual developers conference will take place June 10 through June 14, during which it could reveal its AI game plan. In February, CEO Tim Cook said the iPhone maker was "investing significantly" in AI and teased an announcement "later this year." The conference will be livestreamed on the company's website. 

[PRO] ETFs that stand out

Given the market volatility, investors are looking to exchange-traded funds to position their portfolios. Finance experts picked five top ETFs to buy and hold this year. The Vanguard Total World Stock ETF should be core holding for any long-term investor, said Vahan Janjigian, chief investment officer at Greenwich Wealth Management. 

The bottom line

U.S. consumer optimism appears to be waning as anxiety about the economy grows.

The closely watched consumer confidence gauge dipped 104.7 in March, falling below consensus.  

Expectations for the next six months also slipped to the lowest level since October, down 73.8 from 76.3 in February.

The outlook for business and labor market conditions as well as income expectations deteriorated in March. 

"Consumers' assessment of the present situation improved in March, but they also became more pessimistic about the future," said Dana M. Peterson, chief economist at The Conference Board. 

"Consumers remained concerned with elevated price levels, which predominated write-in responses. March's write-in responses showed an uptick in concerns about food and gas prices."

While overall inflation has moved lower in recent months, it is still running hot as recent economic data shows. Concerns are rising despite continued resilience in the U.S. economy and strong jobs growth.

"Household pessimism around future income growth is building despite an improved view of the current jobs market. If continued, income concerns signal a potential challenge for coming spending," Wells Fargo said in a note.

If the still-sturdy labor market starts to soften, that will "translate to weaker wage gains and thus spending as the year progresses," the bank added. "The confidence figures may pick up signs of that pressure first."