The latest reading for the UBS/Gallup Index of Investor Optimism shows U.S. investors souring on the markets. The index dropped 16 points for April, and is now at a five-month low of 63.

This year began with a reading of 93 in January, it dropped 13 points in February, and remained steady in March. The index had a baseline of 124 when it was launched in October 1996.

In three key measures, investors showed declining optimism about the U.S. investment climate over the next 12 months, it noted. Only 45% of investors are optimistic about economic growth, compared with 50% in March. Confidence in the performance of the stock market also dipped. Last month, more than half of respondents were optimistic about the stock market’s performance, but in April that figure is below 50%. Investors also see inflation as increasingly troublesome. In March, only 37% were pessimistic about the impact of inflation on the investment climate; this month that number has risen to 42%.

“The recent rise in inflation, driven primarily by the price of oil, has significantly impacted investors’ outlook the broader economy and the U.S. investment climate,” said Anne Briglia, director, UBS Wealth Management Research.

The 97th Index of Investor Optimism was conducted April 1-16. The sample included 802 investors randomly selected from across the country. For this study, the American investor is defined as any person who is head of a household or a spouse in any household with total savings and investments of US$10,000 or more. The sampling error is plus or minus four percentage points.