Etsy Inc ( 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 ( 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 ( 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 ( ETSY ) sellers within the chat interface. .

The ChatGPT integration initially supports single-item purchases from U.S. Etsy ( 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 ( 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 ( 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 ( ETSY ) with a Buy rating on Tuesday and raised the price target from $72 to $81.

ETSY Price Action: Etsy ( ETSY ) shares were down 11.81% at $65.56 at the time of publication on Tuesday, according to Benzinga Pro.

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