The numbers: The University of Michigan’s gauge of consumer sentiment plunged to a preliminary August reading of 70.2 from a final July reading of 81.2. Economists polled by the Wall Street Journal had expected an August reading of 81.3. There have only been six larger drops in the index in the history of the survey.

Key details: According to the UMich report, a gauge of consumers’ views on current conditions tumbled 77.9 in August from 84.5 in the prior month, while a barometer of their expectations fell to 65.2 from 79 in July.

Big picture: The decline was due to consumers sensing that the delta variant of the coronavirus means that the pandemic will not end soon. This caused an emotional reaction and generated negative assessments about the economy’s likely performance.

Consumer sentiment had been on the mend although it never fully recovered to its pre-pandemic readings over 100.

Market snapshot: Stocks lost most of their early gains after the confidence data with the Dow Jones Industrial Average.