Editor’s note: This story has been updated to correct an error in the price action of Charter Communications stock.
A worse-than-expected University of Michigan May consumer report halted stock gains on Friday, sparking worries about a potential decline in consumer health amid perceived rising price pressures.
The report disclosed that both near-term and long-term inflation expectations have surged beyond projections this month, causing the broader consumer gauge to hit its lowest levels in six months.
“If spending slows down and inflation increases, we'll get the opposite of the Goldilocks scenario that many were hoping for, and the Fed will be in an especially difficult position of choosing between accommodating a slowing economy and fighting increasing inflation expectations,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Echoing this view, Jeffrey Roach, chief economist for LPL Financial, sees rising risks of stagflation, a concern that could unsettle markets.
At 12:05 p.m. trading in New York, the S&P 500 was 0.1% lower, but it was firmly up by 1.6% for the week, poised to secure a third consecutive week of gains after three of losses.
The Dow Jones Industrial Average was a tad higher, battling to secure the eight straight session of gains, the longest positive streak since December 2023. Tech stocks were flat. Small caps were the underperformers, with the iShares Russell 2000 ETF (NYSE:IWM) down 0.9%.
The rising inflation perceptions in the consumer survey rescued the dollar, which eyes a positive weekly close, after two negative ones.
Treasury yields also inched higher by about 4 basis points across all maturities. The 10-year benchmark hit 4.5%.
Gold surged to $2,385/oz, with the SPDR Gold Trust (NYSE:GLD) up 0.8%.
The dismal consumer sentiment data sharply weighed on Bitcoin (CRYPTO: BTC) with the largest cryptocurrency dropping over 4% from $63,000 to below $60,500 following the report.
Chart of The Day: Michigan Consumer Sentiment Data Dings Bitcoin
Friday’s Performance In Major US Indices, ETFs
| Major Indices | Price | 1-day %chg |
| Dow Jones | 39,411.32 | 0.1 % |
| Nasdaq 100 | 18,108.22 | 0.0% |
| S&P 500 | 5,209.09 | -0.1 % |
| Russell 2000 | 204.04 | -0.9% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) was unchanged at $520.20, the SPDR Dow Jones Industrial Average (NYSE:DIA) rose 0.2% to $394.65 and the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) was up 0.1% to $441.38, according to Benzinga Pro data.
Sector-wise, the Financials Select Sector SPDR Fund (NYSE:XLF) outperformed, up 0.5%. The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) was the major laggard, down 0.6%.
Friday’s Stock Movers
- Novavax Inc. (NASDAQ:NVAX) surged by an astonishing 122%, after the company announced a Covid-19 vaccine licensing deal with Sanofi (NASDAQ:SNY). The pharmaceutical company reported a lower than expected loss last quarter, but missed revenue estimates.
- MacroGenics Inc. (NASDAQ:MGNX) tumbled by 77% following an interim update on a mid-stage study of a cancer drug candidate, which reported the unfortunate deaths of several study participants. Furthermore, the results for the quarter fell short of expectations.
- Charter Communications Inc. (NASDAQ:CHTR) rose 4.6% after the company started a tender offer to buy back senior secured notes due 2025 for up to $1.7 billion in cash.
- Moderna Inc. (NASDAQ:MRNA) dropped by 4% after the company announced that the FDA won’t finish its review of MRNA’s respiratory syncytial virus (RSV) vaccine by the scheduled action date of May 12 due to administrative constraints. The FDA has communicated that it anticipates completing the review by the end of May.
- Companies reacting to earnings were Gen Digital Inc. (NASDAQ:GEN) up 15%, Mettler-Toledo International Inc. (NYSE:MTD) up 14%, Akamai Technologies Inc. (NYSE:ANET) down 10%, Ubiquiti Inc. (NYSE:UI) up 8%, DigitalOcean Holdings Inc. (NYSE:DOCN) up 6.6%, Construction Partners Inc. (NASDAQ:ROAD) up 2.6%, Sylvamo Corp. (NYSE:SLVM) down 5%, Costamare Inc. (NYSE:CMRE) up 1.3%, Marathon Digital Holdings Inc. (NASDAQ:MARA) down 8%, Insulet Corp. (NASDAQ:PODD) down 4%, H&R Block Inc. (NYSE:HRB) up 9.7%, and Genpact Ltd. (NYSE:G) up 5.7%.
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Image generated using artificial intelligence via Midjourney.
