US stocks gain despite gloomy consumer data. S&P 500 extends winning streak to five days
U.S. stocks closed higher, with the broad S&P 500 scoring a fifth consecutive day of gains, despite a report showing worsening consumer sentiment amid tariff and inflation worries.
The University of Michigan's preliminary May consumer sentiment index fell for a fifth straight month to 50.8, below economists' forecast for 53.5.
"Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy," said Joanne Hsu, the survey's director.
However, investors shrugged off the report because Americans were surveyed between April 22 and May 13, which meant it did not necessarily encompass sentiment changes from the May 12 pause on some Chinese tariffs.
The "May sentiment slump overstates the negativity of the U.S. consumer," said James Knightley, chief international economist at Dutch bank ING. "The subsequent China-U.S. trade truce and rallying stock markets should mean the final May print" is better.
The blue-chip Dow edged up 0.78%, or 331.99 points, to 42,654.74; the S&P 500 added 0.7%, or 41.45 points, to 5,958.38; and tech-laden Nasdaq rose 0.52%, or 98.78 points, to 19,211.10. All three major indexes gained on the week.
The benchmark 10-year Treasury fell to 4.441%.
More clarity on tariffs also is expected in coming weeks, which could further soothe markets. President Donald Trump said Friday the U.S. will unilaterally set tariffs for many countries soon. He said 150 countries wanted to make deals.
"So at a certain point over the next two to three weeks, I think Scott and Howard will be sending letters out, essentially telling people— it will be very fair but we will be telling people what they will be paying to do business in the United States," Trump said, referring to Scott Bessent, U.S Treasury Secretary and Howard Lutnick, U.S. Secretary of Commerce.
Since the U.S. and China announced a trade deal last weekend, stocks have rallied on relief that soaring inflation and a recession may now be averted.
In addition to more insight on tariffs, investors are also keeping an eye on Trump's tax bill. On Friday, Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts surprisingly blocked the measure.
Encouraging economic data also boosted stocks on Thursday.
Retail sales in April edged up 0.1%, topping economists' forecasts for unchanged, and producer prices fell. Producer prices, or wholesale prices, measure what businesses are paying for their goods and services.
"While the news has been dominated by the negative impact of tariffs, (the) retail sales numbers show that consumers have continued to advance their retail spending even in the face of rising uncertainty," said Neil Saunders, managing director of GlobalData.
And with inflation easing, the Federal Reserve may have room to lower rates later this year, some economists said.
Corporate news
- Charter Communications agreed to buy closely held rival Cox Communications for $21.9 billion. Charter shares rose 1.83%.
- Applied Materials' earnings in its second fiscal quarter topped analysts' expectations but sales just missed. The chip company said the trade war hasn't significantly changed demand. Shares fell 5.25%.
- Video-game maker Take-Two warned it will report a full-year loss and lower-than-expected sales after delaying the next installment of the “Grand Theft Auto” franchise. Shares dropped 2.41%.
- Novo Nordisk's chief executive is stepping down. Shares shed 2.69%.
- Doximity shares slid 10% after the health-care platform issued disappointing guidance.
Cryptocurrency
Senate negotiators are circulating a revised crypto bill that would create the first-ever U.S. regulatory framework for stablecoins, which are digital tokens that are pegged to the dollar, according to Politico. They hope the bill could make its way for a floor vote in coming days, it said.
Separately, crypto exchange Coinbase confirmed on Thursday the U.S. Securities and Exchange Commission has been investigating whether the company has misstated its user numbers. Coinbase shares, though, jumped 9%.
Bitcoin was last up 0.21% at $103,984.00.
This story was updated with new information.
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.