Wall Street's Big Selloff Puts Pressure on U.S. Households

What You Need To Know

• The equity plunge is unsettling for investors and may force Americans to save more, says Kaixian Tan, an analyst at Gavekal Research.
• For every $1 decrease in net worth, consumer spending ultimately declines by two cents, according to Mark Zandi, chief economist at Moody’s Analytics. .
• Known as the “wealth effect,” people tend to spend when assets are buoyant — and do the opposite when they’re stressed out.