Harvard, looking to recruit more socioeconomically diverse students, will vastly expand its financial aid program, the college announced. From this fall, students whose families make less than $200,000 will receive free tuition, which typically costs about $57,000 per year. Families making under $100,000 annually will receive free tuition, housing, and food. The previous threshold for this group was $85,000. The expansion, which Harvard says would cover 86% of American families, mirrors other elite universities’ efforts to avoid labels of elitism.
The U.S. consumer is holding up pretty well even as businesses scramble to adjust to President Donald Trump’s trade war, economic indicators show. This is helping to support stock prices — especially on days when the president doesn’t mention tariffs.
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The S&P 500 Dow Jones and Nasdaq Composite indexes closed higher on Monday after overall retail sales rebounded by less than expected in February, rising 0.2% from January — but the control group that feeds into GDP topped forecasts with a 1% increase.
By contrast, the New York Fed’s Empire manufacturing index fell by almost 26 points to -20 for March, the lowest level since early 2024, while the price measure picked up. Additionally, the NAHB homebuilders index for this month also weakened unexpectedly.
We’re seeing “resilience of economy on consumer side, but weakness on business side as companies deal with tariff issue,” economist Ed Yardeni said on a conference call. While the U.S. economy isn’t definitely heading for a recession, the odds of one have increased.
And while current bear indicators are at levels that usually signal a screaming buy for stocks — because they prompt the Federal Reserve to cut interest rates — that’s not going to happen at this week’s meeting of the central bank, Yardeni said. Policymakers still remain dovish, however, and may cut later this year, he added.
“Get a neck brace, the volatility will most likely continue,” Yardeni said, adding that he’s not sure that the stock market has hit bottom.
The situation may stabilize after the Trump administration imposes reciprocal tariffs on April 2 — provided that it then negotiates the rates down. If they become a permanent feature, as Trump has insisted they will be, the situation would be different.
Pantheon Macroeconomics sees the elevated risk of much weaker growth as consumers seek to rebuild a savings buffer in response to concerns about job security, keeping to its projection of 75 bps of rate cuts this year.
Treasury Secretary Scott Bessent said Sunday on NBC’s (CMCSA+1.16%) “Meet the Press” that he he was “not at all” worried about the stock market, calling corrections “healthy.”
Thousands of employees returned to the Food and Drug Administration’s headquarters Monday to find overflowing parking lots, long security lines, and makeshift office spaces without chairs and other basic supplies.
The FDA is the latest agency scrambling to meet the Trump administration’s return-to-office mandate, part of a flurry of actions — including firings and buyouts — intended to radically shrink the federal workforce. Monday was the first day that all rank-and-file FDA staffers were required to report to offices, including the agency’s 130-acre campus just outside Washington.
The Associated Press spoke with more than a half-dozen FDA staffers who described long lines to park and clear security, followed by hours of hunting for space and supplies in offices that were not designed to accommodate the agency’s full workforce. The staffers spoke on condition of anonymity because they were not authorized to speak with the media.
One staffer described “chaos and lost work hours” for commuting, security lines, and shuffled office space.
About half the FDA’s 20,000 scientists, attorneys, inspector,s and support staff report to the agency’s main campus in White Oak, Maryland, which until the late 1990s was a naval weapons testing facility.
While many agencies switched to telework during the COVID-19 pandemic, the FDA began embracing the practice a decade earlier. Most employees had the option to work from home at least two days a week — flexibility that was seen as a competitive perk for recruiting highly trained experts who can often earn more working in ithe ndustry.
By 7:30 a.m., many on-campus parking lots were full, with cars parked along side streets, according to employees. Some workers reported waiting up to one hour to clear security checkpoints, and photos viewed by the AP showed lines of employees winding out doorways, along sidewalks and around corners.
Once inside, employees confronted broken desks, missing chairs, and locked offices for which they didn’t have keys.
“All of the staff is definitely bending over backward to make an impossible situation work and get their work done,” said one employee.
Some employees were left to scour the campus for chairs and other essentials.
“People are looting chairs from conference rooms and other buildings,” a staffer said. “We have no supplies. People are hunting around all of the buildings on campus for pads of paper and other basics.”
When employees did get situated, many shared cramped spaces with people from different divisions and teams, making it difficult to hold calls and meetings. Photos shared with the AP show folding chairs and tables set up in hallways and lobbies.
An FDA spokesman said in an email Mondaythat the agency “is continuing its return-to-office activities to ensure staff remain able to conduct their important public health work.”
All the employees told the AP that they brought their own drinking water on Monday. That’s due to a monthslong issue involving Legionella, the bacteria that causes Legionnaires’ disease, which was detected at several FDA buildings. The General Service Administration, which oversees federal buildings, has been working on the issue since last summer.
FDA staff received an email earlier this month that all water is safe to drink, but it did not detail the latest testing results or corrective actions taken.
Anthony Lee, who represents the local chapter of the federal union for FDA employees, said the agency has not granted the group’s request for a meeting on the issue.
Asked about the water, one staffer said: “Honestly, none of us have tried it. After months of Legionella warnings, it’s not very inviting.”
The Fed's challenges going into this week's meeting:
1. A Fed split on rate cuts: The Fed is divided, with some predicting only one rate cut instead of the three anticipated by the markets.
2. Inflation risks: Tariffs are larger and more broadly based than in 2018-19, increasing the risk of a more persistent bout of inflation. Retaliation and longer, more fragile supply chains add to the uncertainty, making a mild bout of stagflation likely.
3. Powell's approach: Fed Chair Powell will aim to maintain calm and avoid stoking financial market fears. He emphasizes the need to see concrete data before making any policy changes, focusing on separating the "signal from the noise" in the administration’s rapid agenda.
4. Inflation Indicators: Despite recent cooling in the CPI, other inflation measures like the core PCE index show signs of acceleration.
5. Quantitative tightening and Treasury Bonds: The Fed will need to address its quantitative tightening, possibly ending it or rolling off Treasury bond holdings by late spring to avoid liquidity issues. Central banks are buying more gold instead of Treasuries, which could keep long-term rates elevated.
People are increasingly treating generative AI chatbots like personal shopping assistants, Adobe (ADBE+0.83%) said on Monday.
The software and research firm surveyed 5,000 U.S. consumers and found that 39% have turned to AI for online shopping help, while 53% said they intended to do so this year. However, this doesn’t mean ChatGPT research typically ends with a purchase.
Instead, while traffic from the latest evolution of chatbots “show 8 percent higher engagement,” such visitors are also “9 percent less likely to convert compared to other sources of traffic” as of Feb. 2025, Adobe said, citing its analysis of “1 trillion” U.S. retail site visits.
In other words, Generative AI today seems more like a tool for window shoppers than a boon for retailers, but this dynamic could flip. According to Adobe, that 9% figure “has improved significantly from July 2024, when the same number was 43 percent.” The software giant elaborated: “The conversion gap reinforces that AI is being utilized during the research and consideration stage, in advance of when shoppers are ready to hit the buy button.” But, it added, the closing gap “shows that consumers are also increasingly comfortable completing a transaction directly after an AI-powered chat experience.”
When shoppers turn to AI tools, Adobe found they mostly do so for general research (55%), followed by product recommendations (47%), deal hunting (43%), gift ideas (35%), finding “unique products” (35%), and drafting lists (33%).
Another interesting wrinkle in the report is that website traffic linked to AI tools typically comes from desktops and laptops (86%), rather than smartphones. Adobe explains that this preference sharply contrasts the broader, longstanding trend in e-commerce, “where desktop share-of-visits came in at just 34 percent during the same period.”
Tesla’s (TSLA-4.63%) Optimus robots have come a long way from their often-mocked introduction in 2021 when a human dressed in a costume appeared onstage for a demonstration. However, while the overall design has changed between the first and second generations of the humanoid bot, it still doesn’t look very personable.
“By the way, I gotta ask, how come your robots look so much like the creepy robots from ‘I, Robot,’” Texas Republican Sen. Ted Cruz asked Tesla CEO Elon Musk in a podcast episode that aired Monday. “Was that intentional?”
Cruz was referring to the 2004 movie starring Will Smith set in the year 2035, where highly intelligent humanoid robots take over public service jobs. The vast majority of those robots, controlled by an artificial intelligence computer, later attempt to take over the world in order to save humanity from themselves.
“It’s not meant to look like any prior robot,” Musk said of Optimus’ design, adding that Tesla will iterate the design.
The faceless robots have been called creepy before. However, non-crucial parts of the robots will be customizable by customers, according to Musk.
“A lot of the robot parts are cosmetic, you’ll be able to switch out the kind-of snap-on cosmetic parts of the robot [and] make it look like something else if you’d like,” Musk told Cruz on the “Verdict with Ted Cuz” podcast.
Making Optimus easier on the eyes would likely help Tesla compete with the growing number of major competitors, such as Figure AI — which plans to eventually make 100,000 robots each year — or Apptronik, which has worked with Mercedes-Benz (MBGAF+0.37%). Musk envisions a world where humans will be outnumbered by their robotic counterparts in just a decade-and-a-half.
For Optimus, specifically, broad appeal will be crucial. Although a faceless design may be fine for robots assigned to security duty or for work in Tesla’s factories, that may not be a good idea for some of the other roles Musk has discussed assigning to Optimus.
“What can it do? It can basically do anything you want,” Musk said in October. “It can be a teacher, babysit your kids, it can walk your dog, mow your lawn, get the groceries, just be your friend, serve drinks. Whatever you can think of, it will do.”
During a January earnings call, where Musk said Optimus will eventually make up the “overwhelming” value of Tesla, Musk said the robots will also be able to play the piano and thread a needle. The robots are expected to eventually be sold for between $20,000 and $30,000 each. Mass production is scheduled to begin this year, according to Tesla.
Gov. Gavin Newsom’s administration has been sending cellphones to business executives in an effort to maintain relationships with some of California’s most powerful business leaders, according to his office. His office confirmed Monday night that the governor has been sending phones “on a rolling basis” since November to executives who lead some of the “largest (top-100) California-based companies” with Newsom’s direct phone number programmed into them. “This was the governor’s idea to connect more directly with business leaders in the state,” spokesperson Izzy Gardon said in an email after KCRA first reported the existence of the phones. “The feedback has been positive, and it’s led to valuable interactions.” Gardon did not immediately respond to follow-up questions about which company executives received phones, how many phones have been sent out or what Newsom and those executives have discussed. Newsom has previously leveraged his business world connections — mostly recently tapping his friend, sports mogul Casey Wasserman — to shore up private donations to fund wildfire recovery efforts in Los Angeles County. The California State Protocol Foundation is paying for the phones, Newsom’s office said. The nonprofit was founded in 2002 to offset costs for ceremonial activities and trips like the governor’s previous excursions to Italy, El Salvador and China. Steve Kawa, the foundation’s principal officer, could not be immediately reached for a request for comment. Kawa was Newsom’s chief of staff when he was mayor of San Francisco from 2004 to 2011.
U.S. shoppers stepped up their spending just a bit in February after a sharp pullback the previous month, signaling that Americans are shopping more cautiously as concerns about the direction of the economy mount.
Retail sales rose just 0.2% in February, a small rebound after a sharp drop of 1.2% in January, the Commerce Department said Monday. Sales rose at grocery stores, home and garden stores, and online retailers. Sales fell at auto dealers, restaurants, and electronics stores.
The small increase suggests Americans may be growing more wary about spending as the stock market has plunged and President Donald Trump’s tariff threats and government spending cuts have led to widespread uncertainty among consumers and businesses.
Some economists were relieved the numbers weren’t worse. Still, many expect consumer spending will grow just 1% to 1.5% at an annual rate in the first three months of this year, far below the 4.2% gain in the final quarter last year.
“Consumer spending is on track to slow sharply this quarter, but not by as much as we previously feared,” Stephen Brown, an economist at Capital Economics, a consulting firm, said in an email.
On Friday, a measure of consumer sentiment fell sharply for the third straight month and is now down more than 20% since December. Respondents to the University of Michigan’s survey cited policy uncertainty as a leading reason for the gloomier outlook. While the respondents were divided sharply by party — sentiment about the current economy fell among Republican by much less than for Democrats — Republicans’ confidence in the economy’s future dropped 10%.
Consumers from all income levels are feeling more strained.
Hunter Simmons of Austin, Texas, who is a lawyer and journalist, said that the uncertainty around the economy because of the stock market turmoil and tariffs has made him more cautious about spending. He said he used to buy the more expensive farm fresh eggs, but now he’s going for the cheapest eggs he can find. He’s also been buying fewer fresh vegetables and fruits and has turned to frozen versions. And lately Simmons started to pay for gas in cash and is joining fuel rewards programs.
“I am not a big spender in general, but I have been cutting back in small ways,” he said.
A slew of earnings reports over the past few weeks from major retailers including Walmart, Macy’s and Dollar General have cited a slowdown in spending.
Walmart, the nation’s largest retailer and a bellwether for the retail sector, released a weak outlook last month citing uncertainty around tariffs.
February sales also fell last month at gas stations, clothing stores, and sporting goods stores. The figures aren’t adjusted for prices, and the cost of gas also declined in February, which likely accounts for most of the drop. Excluding gas and autos, retail sales rose 0.5%, a healthier figure but still modest after a plunge of 0.8% in January.
Also Monday, the National Association of Homebuilders said its index measuring builder sentiment fell three points to 39, the lowest level in seven months, as economic uncertainty dimmed builders’ outlook and fewer potential buyers visited homes.
“Economic uncertainty, the threat of tariffs and elevated construction costs pushed builder sentiment down in March,” the group said. The homebuilders estimate tariffs will add $9,200 to the cost of a new home.
Macy’s says its customers, even at its upscale chains Bluemercury and Bloomingdale’s, are feeling angst and its financial outlook this month reflects that.
“I think the affluent customer that’s shopping Macy’s is just as uncertain and as confused and concerned by what’s transpiring,” Macy’s CEO Tony Spring said at the time.
Hiring has mostly held up and there are no signs that companies are laying off workers. As long as Americans have jobs, spending could remain resilient. But that is not assured.
Dollar General CEO Todd Vasos said Thursday that the overall economic picture for his customers is not ideal and the company said it would close around 100 stores.
“Our customers continue to report that their financial situation has worsened over the last year as they have been negatively impacted by ongoing inflation ” Vasos said during an earnings call. “Many of our customers report that they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.”
Spending patterns at Costco have changed to accommodate a soured view of the economy, including a shift toward ground beef and poultry instead of more expensive cuts of meat, said to Gary Millership, the company’s chief financial officer.
American Eagle Outfitters CEO Jay Schottenstein said angst is particularly high among younger customers.
“Not just tariffs, not just inflation,” said Schottenstein. “We see the government cutting people off. They don’t know how that’s going to affect them. And when people don’t know what they don’t know – they get very conservative.”
The retail sales report mostly just covers goods purchases — as well as restaurant sales — but there are signs Americans are cutting back spending on services as well.
Airline executives at JP Morgan’s airline industry conference last week said bookings have fallen.
“There was something going on with economic sentiment, something going on with consumer confidence,” said Delta CEO Ed Bastian at the industry conference.