Latest news with #PCE
Yahoo
5 hours ago
- Business
- Yahoo
Here's why the cool inflation print isn't exciting markets
The Federal Reserve's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, showed that price increases slowed in April. But as Numerator chief economist Leo Feler explains in the video above, the data may be too backward-looking to excite Wall Street. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This PCE report that came out today, it's backward looking. It's looking at what happened in April, right? And so, in April, that's still way too early for uh any of the tariffs to have had any kind of meaningful impact uh on uh consumer price inflation. What we expect uh is that as firms deplete the inventories that they built up and and we also saw that firms built up a lot of inventory in January, February, and March. Um it's really going to be uh as those inventories are depleted, as firms are starting to bring in uh additional goods coming in from abroad. That's when the tariffs are likely to start having an impact. And so we're really thinking about uh perhaps later in June, July, August and on things that are going to be uh produced uh abroad. You have to think about things are going to be like back-to-school shopping, backpacks, apparel, computers. Um those are the the the items that would really start uh showing some kind of inflationary impact and as you said, I think the Fed is right to look through these current numbers because they're talking about what could have been the case. You know, had it not been for these trade wars, had it not been for some of the policy uncertainty. Um and they're really waiting to see whether or not there will be this uptick in inflation going forward so that they don't make the same mistake again uh of thinking that, you know, there might be a temporary inflation shock, transitory inflation, that turns out to be much more persistent as we had uh in 2021 and 2022.
Yahoo
a day ago
- Business
- Yahoo
Here's why the cool inflation print isn't exciting markets
The Federal Reserve's preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, showed that price increases slowed in April. But as Numerator chief economist Leo Feler explains in the video above, the data may be too backward-looking to excite Wall Street. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Inflation keeps falling despite tariff clamor
Prices are cooling even though President Trump's trade war is dragging on and businesses keep threatening to raise their prices in response to it. The personal consumption expenditures (PCE) price index fell to a 2.1-percent annual increase in April, down from 2.3 percent in March and 2.6 percent in April, the Commerce Department reported Friday. Removing the more volatile categories of food and energy, PCE prices fell to a 2.5-percent increase. 'The impact of tariffs is once again missing from the inflation report,' Scott Helfstein, head of investment strategy at financial company Global X, said in a commentary. 'Each month we keep trying to assess whether tariffs are going to drive inflation higher, but the pauses keep pushing the prospect of higher prices further out,' he wrote. White House trade policy went through another major turnaround this week. Trump's wide-ranging emergency tariff powers, encompassing his national security tariffs and novel 'reciprocal' tariffs, were struck down by a court Wednesday before immediately being reinstated by a higher court Thursday. Cooling PCE inflation follows a similar pattern in the consumer price index (CPI), another pricing benchmark. After ticking up through the fall, the CPI has fallen throughout the first quarter of this year, dropping down to a 2.3-percent annual increase from 3 percent in January. U.S. consumers and businesses are showing themselves to be highly attuned to all the policy changes, which are coming fast and furious from the White House. After Trump's trade war tanked consumer and business sentiment earlier this year, importers executed a massive pull-forward in orders, leading to a 0.3-percent contraction in first-quarter gross domestic product (GDP). Consumers followed suit, increasing spending on automobiles by a whopping 57 percent in March ahead of expected tariffs. Now, just as businesses are holding off on making investments and capital expenditures, consumers are holding off on making purchases amid continued policy fluctuations. The April PCE report showed spending increasing by just 0.2 percent last month, while the personal saving rate increased to 4.9 percent from 4.3 percent in March. 'There is clear evidence that consumers are battening down the hatches, with data showing the highest savings rate since May 2024. However, robust disposable income growth bodes well for future spending,' Olu Sonola, head of U.S. economic research at Fitch Ratings, commented. Sustained hesitance from consumers in response to policy ambiguity could work against the many inflationary prognostications now swirling about the economy, driving down price pressures even as tariffs threaten to raise them. The minutes of the latest Federal Reserve meeting painted a stagflationary picture of the economy, with bankers voicing concerns about higher prices, lower output levels and increased unemployment. 'Tariffs were expected to boost inflation markedly this year,' the minutes say – an increase that has yet to materialize. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
a day ago
- Business
- Yahoo
Stock market today: S&P 500, Nasdaq, Dow drop as US-China tensions heat up while PCE inflation cools
US stocks headed lower on Friday as investors absorbed a fresh wave of tariff uncertainty and a cooldown in inflation pressures, as measured by the Federal Reserve's preferred price gauge. The tech-heavy Nasdaq (^IXIC) led the declines, dropping about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6% after the major gauges ended Thursday in the green. Losses deepened after Bloomberg reported that the Trump administration plans to broaden tech restrictions on China by targeting subsidiaries of firms already sanctioned. The proposed rule would require US government licenses for transactions involving companies majority-owned by entities on the so-called Entity List, aiming to close loopholes used to circumvent existing curbs. The Bloomberg report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US less than three weeks after the world's two largest economies reached a tariff detente. Trade talks between the US and China are "a bit stalled," Scott Bessent told Fox News on Thursday. The Treasury Secretary said a call between Trump and President Xi is needed to reach a deal, as the two countries continue to clash over chip curbs and visas on the sidelines. The China escalations came after the tariffs faced a bout of legal drama — a new source of uncertainty. On Thursday, a US appeals court on Thursday paused a trade court block on Trump's global tariffs, giving the White House until next Monday to file a challenge to the ruling. At the same time, his team is exploring other ways to issue the tariffs. Read more: The latest on Trump's tariffs Meanwhile, inflation continued cooling in April, according to the latest reading of the Personal Consumption Expenditures (PCE) index. The "core" PCE index, closely watched by the Fed, rose in line with expectations on a monthly and annual basis. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Though May has been filled with trade-war switchbacks, US stocks are on track to close the month out on Friday with hefty gains. The S&P 500 is eyeing a jump of over 6%, the Dow, a rise of about 4%. The Nasdaq Composite is headed for a surge of almost 10% as tech stocks revive. The gauges are set for a winning week too. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6%. The Nasdaq Composite (^IXIC) sank to its lows of the day just before noon on Friday, falling about 0.6%. The chip sector led the decline with several key names under pressure after President Trump said China has "violated" its trade agreement with the US. Nvidia (NVDA), AMD (AMD), Micron (MU), and Intel (INTC) were all down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: Read more here. Regeneron (REGN) stock fell more than 18% in early trading after the company's experimental drug for smoker's lung failed a late-stage trial. The drug did, however, pass a separate earlier-stage trial. Read more on Regeneron here. Consumer sentiment steadied in May as Americans grew more optimistic about the US economy following developments in President Trump's trade policy. According to the final May reading of the University of Michigan consumer sentiment survey released Friday, headline sentiment remained unchanged from the previous month, halting a four-month streak of sharp declines. While sentiment dipped in the preliminary May reading, it rebounded later in the month, buoyed by a temporary pause on certain tariffs on Chinese goods that helped improve the economic outlook. "Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement," Joanne Hsu, director of consumer surveys at the University of Michigan, said in the release. Long-run inflation expectations, which reflect the outlook over the next five to ten years, eased to 4.2% in May from 4.4% in April, marking the first decline since December 2024 and ending an unprecedented four-month streak of increases. Meanwhile, year-ahead inflation expectations held relatively steady at 6.6%, up slightly from 6.5% in April. This modest uptick is the smallest since the election and signals a break in the four-month trend of sharp increases in short-run inflation expectations. Still, the improvement in inflation expectations wasn't enough to outweigh other areas of weakness, leaving consumers' overall mood subdued. "These positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May," Hsu said. "Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future." US stocks slid on Friday as investors absorbed a fresh wave of tariffs uncertainty and a cooldown in inflation pressures, according to the Federal Reserve's preferred price gauge. The benchmark S&P 500 (^GSPC) fell about 0.3% while the tech-heavy Nasdaq Composite (^IXIC) Dow Jones Industrial Average (^DJI) also slipped roughly 0.3%, after the major gauges ended Thursday in the green. The latest reading of the Federal Reserve's preferred inflation gauge showed price increases slowed in April as inflation remained above the Fed's 2% target. The release comes as investors have been closely watching data releases for signs of how President Trump's tariff policy is impacting the economy. The "core" Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.5% on an annual basis, in line with expectations and lower than the 2.7% seen in March. Core prices rose 0.1% in April from the prior month, in line with expectations and the monthly increase seen in March. On a yearly basis, PCE increased by 2.1%, below the 2.2% economists had expected. From Bloomberg: Read more here. Costco (COST) stock was roughly flat in premarket trading after the company reported mixed earnings on Thursday. The wholesale retailer's adjusted earnings per share were $4.28, above estimates for $4.24, while revenue of $63.21 billion slightly missed expectations. Yahoo Finance's Brooke DiPalma reports: Read more here. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6%. The Nasdaq Composite (^IXIC) sank to its lows of the day just before noon on Friday, falling about 0.6%. The chip sector led the decline with several key names under pressure after President Trump said China has "violated" its trade agreement with the US. Nvidia (NVDA), AMD (AMD), Micron (MU), and Intel (INTC) were all down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: Read more here. Regeneron (REGN) stock fell more than 18% in early trading after the company's experimental drug for smoker's lung failed a late-stage trial. The drug did, however, pass a separate earlier-stage trial. Read more on Regeneron here. Consumer sentiment steadied in May as Americans grew more optimistic about the US economy following developments in President Trump's trade policy. According to the final May reading of the University of Michigan consumer sentiment survey released Friday, headline sentiment remained unchanged from the previous month, halting a four-month streak of sharp declines. While sentiment dipped in the preliminary May reading, it rebounded later in the month, buoyed by a temporary pause on certain tariffs on Chinese goods that helped improve the economic outlook. "Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement," Joanne Hsu, director of consumer surveys at the University of Michigan, said in the release. Long-run inflation expectations, which reflect the outlook over the next five to ten years, eased to 4.2% in May from 4.4% in April, marking the first decline since December 2024 and ending an unprecedented four-month streak of increases. Meanwhile, year-ahead inflation expectations held relatively steady at 6.6%, up slightly from 6.5% in April. This modest uptick is the smallest since the election and signals a break in the four-month trend of sharp increases in short-run inflation expectations. Still, the improvement in inflation expectations wasn't enough to outweigh other areas of weakness, leaving consumers' overall mood subdued. "These positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May," Hsu said. "Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future." US stocks slid on Friday as investors absorbed a fresh wave of tariffs uncertainty and a cooldown in inflation pressures, according to the Federal Reserve's preferred price gauge. The benchmark S&P 500 (^GSPC) fell about 0.3% while the tech-heavy Nasdaq Composite (^IXIC) Dow Jones Industrial Average (^DJI) also slipped roughly 0.3%, after the major gauges ended Thursday in the green. The latest reading of the Federal Reserve's preferred inflation gauge showed price increases slowed in April as inflation remained above the Fed's 2% target. The release comes as investors have been closely watching data releases for signs of how President Trump's tariff policy is impacting the economy. The "core" Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.5% on an annual basis, in line with expectations and lower than the 2.7% seen in March. Core prices rose 0.1% in April from the prior month, in line with expectations and the monthly increase seen in March. On a yearly basis, PCE increased by 2.1%, below the 2.2% economists had expected. From Bloomberg: Read more here. Costco (COST) stock was roughly flat in premarket trading after the company reported mixed earnings on Thursday. The wholesale retailer's adjusted earnings per share were $4.28, above estimates for $4.24, while revenue of $63.21 billion slightly missed expectations. Yahoo Finance's Brooke DiPalma reports: Read more here. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Stock market today: S&P 500, Nasdaq, Dow drop as US-China tensions heat up while PCE inflation cools
US stocks headed lower on Friday as investors absorbed a fresh wave of tariff uncertainty and a cooldown in inflation pressures, according to the Federal Reserve's preferred price gauge. Losses deepened after Bloomberg reported that the Trump administration plans to broaden tech restrictions on China by targeting subsidiaries of firms already sanctioned. The proposed rule would require US government licenses for transactions involving companies majority-owned by entities on the so-called "Entity List," aiming to close loopholes used to circumvent existing curbs. The tech-heavy Nasdaq (^IXIC) led the declines, dropping about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6% after the major gauges ended Thursday in the green. The Bloomberg report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US — less than three weeks after the world's two largest economies reached a tariff detente. Trade talks between the US and China are "a bit stalled," Scott Bessent told Fox News on Thursday. The Treasury Secretary said a call between Trump and President Xi is needed to reach a deal, as the two countries continue to clash over chip curbs and visas on the sidelines. The China escalations came after the tariffs faced a bout of legal drama — a new source of uncertainty. On Thursday, a US appeals court on Thursday paused a trade court block on Trump's global tariffs, giving the White House until next Monday to file a challenge to the ruling. At the same time, his team is exploring other ways to issue the tariffs. Read more: The latest on Trump's tariffs Meanwhile, inflation continued cooling in April, according to the latest reading of the Personal Consumption Expenditures (PCE) index. The "core" PCE index, closely watched by the Fed, rose in line with expectations on a monthly and annual basis. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Though May has been filled with trade-war switchbacks, US stocks are on track to close the month out on Friday with hefty gains. The S&P 500 is eyeing a jump of over 6%, the Dow, a rise of about 4%. The Nasdaq Composite is headed for a surge of almost 10% as tech stocks revive. The gauges are set for a winning week too. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6%. The Nasdaq Composite (^IXIC) sank to its lows of the day just before noon on Friday, falling about 0.6%. The chip sector led the decline with several key names under pressure after President Trump said China has "violated" its trade agreement with the US. Nvidia (NVDA), AMD (AMD), Micron (MU), and Intel (INTC) were all down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: Read more here. Regeneron (REGN) stock fell more than 18% in early trading after the company's experimental drug for smoker's lung failed a late-stage trial. The drug did, however, pass a separate earlier-stage trial. Read more on Regeneron here. Consumer sentiment steadied in May as Americans grew more optimistic about the US economy following developments in President Trump's trade policy. According to the final May reading of the University of Michigan consumer sentiment survey released Friday, headline sentiment remained unchanged from the previous month, halting a four-month streak of sharp declines. While sentiment dipped in the preliminary May reading, it rebounded later in the month, buoyed by a temporary pause on certain tariffs on Chinese goods that helped improve the economic outlook. "Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement," Joanne Hsu, director of consumer surveys at the University of Michigan, said in the release. Long-run inflation expectations, which reflect the outlook over the next five to ten years, eased to 4.2% in May from 4.4% in April, marking the first decline since December 2024 and ending an unprecedented four-month streak of increases. Meanwhile, year-ahead inflation expectations held relatively steady at 6.6%, up slightly from 6.5% in April. This modest uptick is the smallest since the election and signals a break in the four-month trend of sharp increases in short-run inflation expectations. Still, the improvement in inflation expectations wasn't enough to outweigh other areas of weakness, leaving consumers' overall mood subdued. "These positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May," Hsu said. "Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future." US stocks slid on Friday as investors absorbed a fresh wave of tariffs uncertainty and a cooldown in inflation pressures, according to the Federal Reserve's preferred price gauge. The benchmark S&P 500 (^GSPC) fell about 0.3% while the tech-heavy Nasdaq Composite (^IXIC) Dow Jones Industrial Average (^DJI) also slipped roughly 0.3%, after the major gauges ended Thursday in the green. The latest reading of the Federal Reserve's preferred inflation gauge showed price increases slowed in April as inflation remained above the Fed's 2% target. The release comes as investors have been closely watching data releases for signs of how President Trump's tariff policy is impacting the economy. The "core" Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.5% on an annual basis, in line with expectations and lower than the 2.7% seen in March. Core prices rose 0.1% in April from the prior month, in line with expectations and the monthly increase seen in March. On a yearly basis, PCE increased by 2.1%, below the 2.2% economists had expected. From Bloomberg: Read more here. Costco (COST) stock was roughly flat in premarket trading after the company reported mixed earnings on Thursday. The wholesale retailer's adjusted earnings per share were $4.28, above estimates for $4.24, while revenue of $63.21 billion slightly missed expectations. Yahoo Finance's Brooke DiPalma reports: Read more here. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. US markets took another leg lower on Friday after Bloomberg reported the Trump administration plans to expand tech restrictions on China by targeting subsidiaries of already-sanctioned firms. The proposed rule would require US government licenses for transactions involving companies majority-owned by firms on the so-called "Entity List," aiming to close loopholes used to bypass existing curbs. The measure, which could affect major Chinese chipmakers such as Huawei and Yangtze Memory Technologies, is expected to further heighten tensions between Washington and Beijing amid ongoing disputes over semiconductors and critical mineral exports. The report comes on the heels of earlier comments from President Trump, who lashed out at China in a Truth Social post, accusing the country of having "violated" its trade deal with the US. While he did not provide specifics, the comments echoed earlier rhetoric from his administration suggesting that negotiations with Beijing had "stalled." In afternoon trade, the Nasdaq (^IXIC) dropped about 1.6% while the benchmark S&P 500 (^GSPC) fell 1% and the Dow (^DJI) slipped 0.6%. The Nasdaq Composite (^IXIC) sank to its lows of the day just before noon on Friday, falling about 0.6%. The chip sector led the decline with several key names under pressure after President Trump said China has "violated" its trade agreement with the US. Nvidia (NVDA), AMD (AMD), Micron (MU), and Intel (INTC) were all down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: Read more here. Regeneron (REGN) stock fell more than 18% in early trading after the company's experimental drug for smoker's lung failed a late-stage trial. The drug did, however, pass a separate earlier-stage trial. Read more on Regeneron here. Consumer sentiment steadied in May as Americans grew more optimistic about the US economy following developments in President Trump's trade policy. According to the final May reading of the University of Michigan consumer sentiment survey released Friday, headline sentiment remained unchanged from the previous month, halting a four-month streak of sharp declines. While sentiment dipped in the preliminary May reading, it rebounded later in the month, buoyed by a temporary pause on certain tariffs on Chinese goods that helped improve the economic outlook. "Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement," Joanne Hsu, director of consumer surveys at the University of Michigan, said in the release. Long-run inflation expectations, which reflect the outlook over the next five to ten years, eased to 4.2% in May from 4.4% in April, marking the first decline since December 2024 and ending an unprecedented four-month streak of increases. Meanwhile, year-ahead inflation expectations held relatively steady at 6.6%, up slightly from 6.5% in April. This modest uptick is the smallest since the election and signals a break in the four-month trend of sharp increases in short-run inflation expectations. Still, the improvement in inflation expectations wasn't enough to outweigh other areas of weakness, leaving consumers' overall mood subdued. "These positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May," Hsu said. "Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future." US stocks slid on Friday as investors absorbed a fresh wave of tariffs uncertainty and a cooldown in inflation pressures, according to the Federal Reserve's preferred price gauge. The benchmark S&P 500 (^GSPC) fell about 0.3% while the tech-heavy Nasdaq Composite (^IXIC) Dow Jones Industrial Average (^DJI) also slipped roughly 0.3%, after the major gauges ended Thursday in the green. The latest reading of the Federal Reserve's preferred inflation gauge showed price increases slowed in April as inflation remained above the Fed's 2% target. The release comes as investors have been closely watching data releases for signs of how President Trump's tariff policy is impacting the economy. The "core" Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.5% on an annual basis, in line with expectations and lower than the 2.7% seen in March. Core prices rose 0.1% in April from the prior month, in line with expectations and the monthly increase seen in March. On a yearly basis, PCE increased by 2.1%, below the 2.2% economists had expected. From Bloomberg: Read more here. Costco (COST) stock was roughly flat in premarket trading after the company reported mixed earnings on Thursday. The wholesale retailer's adjusted earnings per share were $4.28, above estimates for $4.24, while revenue of $63.21 billion slightly missed expectations. Yahoo Finance's Brooke DiPalma reports: Read more here. Economic data: PCE inflation (April); University of Michigan consumer sentiment (May final) Earnings: Canopy Growth (CGC) Here are some of the biggest stories you may have missed overnight and early this morning: Nvidia's China setback is a tariffs bargaining chip Obscure tax item in Trump's big bill is spooking Wall Street Bessent: US-China trade talks are a 'bit stalled' Trump-Xi phone call needed to reach a deal: Bessent S&P 500's banner month faces off with June's lackluster record Trump to celebrate Nippon Steel 'deal' at Pennsylvania plant China's big techs prepare for AI future without Nvidia Yahoo Finance's Hamza Shaban reports: Read more here from today's Morning Brief. Gap's (GAP) shares sank after the retailer laid out the multimillion-dollar hit to 2025 operating income it expects from President Trump's tariffs, but kept its 2025 forecast unchanged. The stock dropped over 14% despite the retailer posting better-than-expected sales and profit in its first quarter results late on Thursday. Gap said it expects added tariff-related costs of $250 million to $300 million. But the company said it has strategies to halve that amount, without providing full details. It projects a hit of up to $150 million to its full-year operating income, mainly in the second half. Reuters reported: Read more here. Markets across the Asia-Pacific saw pullbacks Friday after yesterday's boost following the temporary reinstatement of Trump's "unlawful" tariffs. Japan's benchmark Nikkei 225 (^N225) declined 1.1% with investors eyeing growing inflation. In South Korea, the Kospi (^KS11) dropped 0.9% as markets remain rattled ahead of a presidential election in a tough political climate. Hong Kong's Hang Seng Index (^HSI) sank 1.5% as China's CSI 300 ( sli0.3% Australia's S&P/ASX 200 (^AXJO) hovered around the baseline, with a gain of less than 0.1% Newsmax (NMAX) Shares in conservative media group Newsmax dropped 10.4% after hours Thursday resulting in a drop of over 75% since the company went public in March. Despite growing viewership Newsmax has faced a number of problems and is currently still engaged in a lawsuit with Dominion Voting Systems over "false claims" spread by the news source after the 2020 election. An overly ambitious IPO valuation combined with weak financial returns have continued to crater stock value. Ulta Beauty (ULTA) Ulta Beauty stock jumped up 8.3% in extended trading after the company beat analyst expectations for Q1. A 4.5% increase in net sales leading to $2.8b in revenue allowed Ulta to issue better-than-expected guidance for Q2. Earnings were reported at $6.70 per share. The Gap (GAP) Stock in apparel company The Gap nosedived 14.8% after-hours despite a solid earnings report as investors eye a potential a $300m hit to the bottom line from Trump's tariffs. The Gap reported revenue of $3.46 billion, well over analyst expectations of $3.42, while earnings per share came in at $0.51. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
