Data from the Commerce Department released on Tuesday showed a second consecutive month of decline in retail sales, after a fall of 0.1% in April.

Retail sales fell more than expected in May by 0.9%, registering the worst drop in four months, as consumer spending declined significantly amid concerns about the direction of the U.S. economy.

This compares with a Reuters estimate of 0.7%, adjusted for seasonality but not inflation.

Data from the Commerce Department released on Tuesday showed a second consecutive month of decline in retail sales, after a fall of 0.1% in April.

Following the release of the retail sales data, U.S. equity markets experienced a pullback; heightened tensions in the Middle East stemming from the Israel-Iran conflict appeared to impact investor sentiment.

The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.52% at the time of writing, while the Invesco QQQ Trust (QQQ) fell 0.54%.

Trump’s tariffs and geopolitical tensions contributed to the pullback in consumer spending, resulting in a sharp decline in retail sales.

Among the key contributors is a decline in motor vehicle purchases, as the rush to beat Trump's tariffs-induced price hikes has seen a decline.

This is despite companies like Ford extending employee pricing to all customers through June 2.

Motor vehicles and parts retailers saw a 3.5% fall during the month. Other categories, like building material suppliers and gas stations, also declined.

While sales of building materials and garden stores fell 2.7%, gas station receipts fell 2% due to lower energy prices.

Bars and restaurants experienced a 0.9% decline in sales.

Trump’s tariff threats and escalating tensions with China during May also played on consumers’ minds.

“We expect a more marked slowdown to take hold in the second half of the year, as tariffs begin to weigh on real disposable incomes,” Michael Pearce, deputy chief economist at Oxford Economics, told Reuters.

Investors are also awaiting the Federal Reserve’s policy announcement. The Federal Open Market Committee (FOMC) is expected to keep rates unchanged, in the 4.25% to 4.5% range, according to CME Group’s FedWatch tool.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<