Etsy Inc (NASDAQ:ETSY) shares are trading lower on Tuesday as retail, apparel and consumer discretionary stocks decline following a drop in consumer confidence, with concerns over a potential government shutdown also weighing on economic sentiment.
What Happened: The consumer confidence index moved lower by 3.6 points in September to a reading of 94.2, down from a reading of 97.8 in August. The data, which was released on Tuesday, shows consumer confidence at its lowest levels since April.
The federal government is also expected to enter a shutdown on Wednesday as Republicans and Democrats struggle to come to an agreement on a spending bill.
Etsy shares may also be pulling back following a strong surge on Monday after OpenAI announced its “Buy it in ChatGPT” feature with instant checkout, making Etsy the first partner for the new capability.
The integration opened a potential new distribution channel, allowing ChatGPT’s 700 million weekly users to purchase directly from over a million U.S. Etsy sellers within the chat interface. .
The ChatGPT integration initially supports single-item purchases from U.S. Etsy sellers, with plans to expand to multi-item carts and additional merchants including Shopify partners like Glossier and SKIMS. OpenAI also open-sourced the underlying Agentic Commerce Protocol to enable broader merchant adoption. Etsy shares closed Monday up 15.8% following the announcement
Morgan Stanley analyst Nathan Feather tempered enthusiasm about Monday’s rally, calling the sizable move “overdone” and questioning whether agentic commerce ultimately benefits or hurts Etsy over the long term. Feather, who maintains an Equal-Weight rating, noted that OpenAI isn’t altering product rankings, meaning the feature may improve conversion rates but is unlikely to generate additional product impressions.
BTIG analyst Marvin Fong maintained Etsy with a Buy rating on Tuesday and raised the price target from $72 to $81.
ETSY Price Action: Etsy shares were down 11.81% at $65.56 at the time of publication on Tuesday, according to Benzinga Pro.
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