Why does a fall in stock prices shift the ad curve to the left?

A fall in stock prices decreases household wealth, leading to reduced consumer confidence and spending. As people feel less financially secure, they are likely to cut back on expenditures, which ultimately lowers aggregate demand. This decline in consumer spending shifts the aggregate demand (AD) curve to the left, indicating a decrease in overall demand in the economy. Lower stock prices can also negatively impact business investment, further contributing to the leftward shift of the AD curve.