Latest news with #PersonalConsumptionExpenditures
Miami Herald
an hour ago
- Business
- Miami Herald
Veteran fund manager who predicted April rally updates S&P 500 forecast
It's been quite a rally. After stocks were deeply oversold in early April following what President Donald Trump called his Liberation Day tariff reveal, the S&P 500 has posted rip-roaring returns, gaining 20% in about six weeks. The rally caught many investors off guard. The potential for tariffs to increase inflation, zapping economic activity and corporate profitability, had sent stocks down 19%, just shy of bear-market territory. One investor who wasn't surprised was the Wall Street veteran hedge fund manager Doug Kass. This Memorial Day, get $100 off TheStreet Pro - our best deal of the summer won't last long! Your portfolio will thank you Kass has been investing professionally since the early 1970s. His career, which includes a stint as research director for billionaire Leon Cooperman's Omega Advisors, has enabled him to make several savvy calls, including forecasting the bull market top in 2021 and bear market low in 2022. More recently, Kass correctly predicted a stock market reckoning this year in December and accurately called for the S&P 500 to bottom after its tariff-driven selloff in April. Kass updated his view on stocks this week, and his latest thoughts may frustrate some investors. The US economy has slowed markedly from its pace last summer, and that should be bad news for the S&P 500, given corporate revenue and profit growth are cornerstones of stock market valuation. The economy's headwinds include shifts in consumer spending toward essentials from discretionary buys amid sticky inflation; a weak jobs market, and eroded consumer and business confidence. Related: Stock market tumbles after uncommon event The uncertainty associated with stiff tariffs and mounting US debt adds to the pressures. In short, the backdrop isn't nearly as favorable as it was for stocks in 2023 and 2024, when optimism that the Federal Reserve would shift from hawkish to dovish monetary policy and growth in spending on artificial intelligence fueled back-to-back 20%-plus returns for the S&P 500. Inflation has retreated since it peaked above 8% in 2022. However, core inflation remains above the Fed's 2% target. The latest core Consumer Price Index and Personal Consumption Expenditures data show inflation at 2.8% and 2.5% in April, respectively. Meanwhile, the Fed's rate cuts last September, November and December have yet to reverse recent job losses. The unemployment rate has increased to 4.2% from 3.4% in 2023. According to Challenger, Gray & Christmas, companies have announced over 602,000 layoffs this year, up 87% from last year. Given inflation and jobs data, it's little wonder consumers feel uneasy, especially amid a turbulent sea of trade war news. The Conference Board's Expectations Index improved last month on hopes of China trade negotiations, but at 72.8 it remains below the 80 threshold commonly found ahead of a recession. Despite all the challenges, the stock market has marched higher since April 9, when President Trump reversed course and paused many of the reciprocal tariffs announced on April 2. However, 25% tariffs remain on Canada, Mexico and autos, and a 30% tariff on China (down from 145% previously). The recent decision by the Court of International Trade blocking most of Trump's tariffs is primarily seen as temporary, with plenty of levers available to the White House to continue its trade war. (In fact, a federal appeals court has delayed the trade court's block on the tariffs as it considers the case.) Yet the stock market has largely shrugged, with the S&P 500 returning 20% from its April 8 low, including a month-to-date 6% return in May. In December, Kass correctly forecast that stocks had run too fast and that the S&P 500 was due for a pullback of 15%. Initially, Kass was wrong, as the S&P 500 rallied into mid-February. But he continued to beat the bearish drum, a savvy move given the S&P 500's 19% slide through early April. More Economic Analysis: Hedge-fund manager sees U.S. becoming GreeceA critical industry is slamming the economyReports may show whether the economy is toughing out the tariffs The stock market's drop was rapid and steep, prompting Kass to correctly pivot to bullish in April, citing the likelihood of an oversold rally. Now that we've received those expected gains, Kass has shifted again, taking a decidedly bearish tone. "I am respectful of the market's extraordinary price momentum over such a short-term time frame; however, I plan to put a larger short stake in the ground," wrote Kass in a post on TheStreet Pro. "Going against the consensus grain and the herd is nothing new to me." Kass's bearishness is rooted in the rise of global economic uncertainty and the potential threat to the concept of American exceptionalism. "Political and geopolitical polarization and competition will probably translate into less centrism and, in turn, a reduced concern for deficits," wrote Kass. "This will create structural uncertainties, fiscal sloppiness, and worldwide imprudence. It will also create the possibility that bond markets 'disanchor.'" Kass says valuation has once again become frothy, given that the forward price-to-earnings multiple is back above 21, according to FactSet. That elevated p/e multiple is problematic if the economy suffers stubborn inflation and slow growth. "I, however, still see valuations and consensus expectations for economic and corporate profit growth inflated," wrote Kass. "So, look for the soft data to weaken into the hard data as the housing market slows and the vulnerability of the middle class is revealed. Expect below trend-line economic growth with sticky inflation lie ahead ("slugflation")." How far could the S&P 500 drop if things worsen? "I view less than 5% upside compared to 10%-15% downside. This is an increasingly unattractive ratio of nearly three to one," said Kass. Related: Fed official sends strong message about interest-rate cuts The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
21 hours ago
- Business
- Yahoo
S&P 500 Gains & Losses Today: Ulta Beauty Stock Soars; Regeneron Shares Plummet
The S&P 500 slipped less than 0.1% on Friday, May 30, 2025, as President Trump rekindled his tough rhetoric on China and a key report revealed softening inflation. Regeneron Pharmaceuticals shares plummeted after the company's experimental COPD treatment fell short of expectations in a late-stage clinical trial. Makeup seller Ulta Beauty reported better-than-expected quarterly sales and profits, and its shares U.S. equities indexes were mixed in the final session of the holiday-shortened trading week as President Donald Trump reverted to an antagonistic tone on trade with China and the latest Personal Consumption Expenditures data showed that inflation fell more than expected in April. The S&P 500 staged a Friday-afternoon rally, coming back from deeper in negative territory to end with a loss of less than 0.1%. The Nasdaq was down 0.3%, while the Dow held onto a gain of 0.1%. The Nasdaq and S&P logged their strongest months since 2023. Read Investopedia's full coverage of today's trading here. Shares of Regeneron Pharmaceuticals (REGN) plunged 19%, dropping the most of any stock in the S&P 500. The losses came after an experimental treatment for chronic obstructive pulmonary disease in former smokers, developed by Regeneron in collaboration with Sanofi (SNY), failed to meet primary endpoints in a Phase 3 trial. The companies said they are reviewing the data and will work with regulators to outline potential next steps. U.S.-listed shares of Sanofi slid 5.7%. Cooper Cos. (COO) shares dropped 15% after the contact lens manufacturer reduced its full-year outlook for organic growth while edging out consensus sales and adjusted profit estimates with its fiscal second-quarter results. Analysts at JPMorgan downgraded Cooper stock to "neutral" from "overweight," citing the company's uneven execution and the possibility of a sustained slowdown in market trends. Shares of Eastman Chemical (EMN), known for its specialty plastics and adhesives, fell 3.8%. The company announced that its molecular recycling project in Longview, Texas, which was previously expected to receive $375 million in public funding, was among 24 awards revoked by the Department of Energy. Cosmetics retailer Ulta Beauty (ULTA) topped sales and profit estimates for its fiscal first quarter and lifted its outlook for the full year. CEO Kecia Steelman highlighted contributions from new and exclusive brands as well as strong sales of fragrance products, noting that consumers were turning to beauty products "as a comfort and escape from the stress of macro uncertainty." Ulta shares skyrocketed 12%, scoring the S&P 500's top daily performance. Shares of Palantir Technologies (PLTR) jumped 7.7% as a New York Times report indicated that the Trump administration has expanded the data analytics software firm's role in government data-sharing initiatives. The tech company, which has lucrative contracts with the federal government and Defense Department, is reportedly engaged in efforts to improve access to data across government agencies. Enphase Energy (ENPH) stock advanced 5.5%. Shares of the solar microinverter manufacturer came under heavy pressure alongside other renewable energy players after the House of Representatives passed a tax and spending bill that would eliminate certain incentives for clean energy projects, including a federal tax credit for the installation of solar rooftop systems. Enphase Energy shares dropped to a 52-week low on May 22, the day the bill was passed, but have staged a partial recovery since. Costco Wholesale (COST) stock added 3.1% after the bulk retailer's quarterly revenue and net income edged out consensus forecasts. Same-store sales also grew more than expected. Analysts have suggested that high-margin membership revenue could provide Costco with some flexibility to navigate tariff-related cost pressure without raising prices. Read the original article on Investopedia
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
Americans pulled back on their spending in April amid tariff rollout
American consumers reined in their spending and socked away their money in April following a tariff-fueled buying binge the month before, according to new data released Friday that also showed inflation cooled off again. Friday's report from the Commerce Department showed that consumer spending rose 0.2% last month, a weaker-than-anticipated reading but a notable retreat from March, when spending soared 0.7% as Americans front-loaded purchases — notably new cars — ahead of potential price increases from President Donald Trump's tariffs. In April, consumers saw a nice 0.8% boost to their incomes, a jump likely attributed to larger Social Security payments as well as continued resilience in the labor market; however, a lot of those funds were plunked into piggy banks: The personal saving rate leapt to 4.9% from 4.3%, according to Friday's report. 'Just as you'd expect, consumers stayed away from the purchase of durable goods like clothing and cars and instead spent mostly on life's necessities like housing, health care, and food services,' Chris Rupkey, chief economist at FwdBonds, wrote in commentary issued Friday. 'This is a trade war report where the consumer is clearly gun-shy.' The latest data also showed inflation moving closer to the Federal Reserve's target of 2%. However, it also indicated that tariff-related price pressures may be already hitting consumers. The Personal Consumption Expenditures price index was 2.1% for the 12 months ended in April, a slowdown from the 2.3% annual gain in March. On a monthly basis, prices rose 0.1%, a slight acceleration after holding steady in March. The biggest price gains last month were seen in durable goods, which rose 0.5%. Economists were expecting the PCE price index to rise 0.2% from March and to ease to an annual rate of 2.2%. Spending was expected to slow to 0.4%, according to FactSet. Inflation is now back at its lowest rate in years, matching a 2.1% gain in September 2024 that was, at the time, a three-and-a-half-year low. Excluding the volatile food and energy categories, the core PCE price index rose 0.1% from March and slowed to an annual rate of 2.5%, the lowest rate since March 2021. Inflation is sitting just a hair's breadth above the Fed's 2% target; however, there likely will be no victory laps nor corks popped from the Fed: Inflation may have been on a cooling course, but the Trump administration's tariffs — the bulk of which are in a temporary holding pattern — threaten to reverse that progress. While the tariffs themselves remain in flux — especially following a US Court of International Trade ruling this week that blocked a large swath of them and a subsequent appeals court ruling that put them back into play — economists weren't expecting the early wave of import duties to have an immediate effect on prices nor on the April inflation data. 'We're looking at very backwards-looking data; we're looking into April, and it's hard to say (to what extent) the total effects of the tariffs have come through,' Dan North, senior economist at Allianz Trade US, said in an interview with CNN. 'I think there's a reasonable case to be made that each report is not going to be quite so rosy as this.' And, with spending and incomes holding up for now, the Fed has the luxury of being able to continue to not have to rush through any interest rate cuts just yet, he said. 'The Fed would really like to see that core and the headline (inflation rates) going down a bit more, because if they cut rates, they might reignite that inflation flame that hasn't gone out already,' he said. There have been significant shifts in tariff policy, and some of the most aggressive duties were curtailed or paused; businesses front-loaded purchases, building up their pre-tariff inventory; and some costs from the initial waves of new tariffs might have been absorbed by retailers and manufacturers. The latest data lands at a time when uncertainty is swelling about the extent to which Trump's sweeping policies — including efforts to tack steep tariffs on most imported goods — could upend global order and the US economy. But that massive uncertainty caused by Trump's policies could negatively ripple through the economy by affecting how consumers and businesses spend. 'Uncertainty is an actual driving force in the economy, and on the business side, they're shaking their heads saying, 'we don't know what to do; our customers are cutting their orders,'' North said. 'Given that atmosphere and this continuous changing in the tariff situation, I see hiring really slowing down in the next couple of months.' A batch of labor market data is due out next week, with the most critical piece being the May jobs report on Friday morning. Economists are still building their forecasts, but early estimates show they expect monthly job gains to slow sharply to around 125,000 from 177,000 in April and for the unemployment rate to tick up to 4.3%. While economists have warned that the better-than-expected data seen in recent months is the calm before the storm, the economy is holding its own for now — despite the ongoing volatility and recession fears. 'I think it's going to be a lot of 'See, I told you,'' coming from the Trump administration, North said. 'They'll likely say that everything is going right, inflation is right, income is right, spending is right, and then the trade deficit in goods is cut in half.' However, it remains to be seen how long this resilience lasts and to what extent the volatility weighs on the economy. Stocks fell Friday after President Donald Trump said China has 'totally violated' its trade agreement with the United States, sending another jolt to markets after a whiplash week of tariff developments. Separate data released Friday by the Census Bureau showed that the United States' trade deficit with its trading partners dropped by 46% last month. Trade deficits capture the difference between a country's exports minus imports. Last month, American exports grew by $6.3 billion, while imports declined by a whopping $68.4 billion. The stunning decline in imports could mean retailers have less of an inventory buffer, leaving them less able to avoid paying future tariffs — and that could lead to price increases for US consumers. CNN's Elisabeth Buchwald and John Towfighi contributed to this report. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
Stock market today: S&P 500, Nasdaq slip 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. The benchmark S&P 500 (^GSPC) fell 0.4%. The tech-heavy Nasdaq Composite (^IXIC) slipped roughly 0.7%, while the blue-chip Dow Jones Industrial Average (^DJI) fell 0.2% after the major gauges ended Thursday in the green. President Trump on Friday ratcheted up tensions with China, claiming it has "totally violated its agreement with 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. 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 of down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: A cooler inflation reading from the month when President Trump's tariffs went full blast likely won't shake the Federal Reserve's stance of holding interest rates steady, with policymakers still seeing a risk that duties push prices higher as the year progresses. "We'll have to wait until next month to get a real sense of how tariffs are affecting the economy,' said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "The question isn't whether tariffs will have an impact, it's a question of how big that impact will be.' 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 April. The Fed's goal is to get this number down to 2%. The new reading was in line with expectations and cooler than the 2.7% annualized change recorded in March. Core prices also rose 0.1% in April from the prior month, in line with expectations for a 0.1% increase and the monthly increase seen in March. 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. 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 of down 2% or more. Read more from Yahoo Finance's Laura Bratton. Yahoo Finance's Jennifer Schonberger reports: A cooler inflation reading from the month when President Trump's tariffs went full blast likely won't shake the Federal Reserve's stance of holding interest rates steady, with policymakers still seeing a risk that duties push prices higher as the year progresses. "We'll have to wait until next month to get a real sense of how tariffs are affecting the economy,' said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "The question isn't whether tariffs will have an impact, it's a question of how big that impact will be.' 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 April. The Fed's goal is to get this number down to 2%. The new reading was in line with expectations and cooler than the 2.7% annualized change recorded in March. Core prices also rose 0.1% in April from the prior month, in line with expectations for a 0.1% increase and the monthly increase seen in March. 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. Sign in to access your portfolio
