Stocks were muted on Friday as market participants reacted to fresh inflation data that came in-line with expectations as Wall Street closes out the first half of the year. The Dow Jones Industrial Average
In Economic News:
Personal Consumption Expenditures (PCE) Price Index was flat month-to-month and up 2.6% on an annual basis in May, The Commerce Department reported Friday. Moreover, core PCE, which excludes foods and energy prices, increased at a seasonally adjusted 0.1% for the month and 2.6% year-over-year, with the latter ticking a 0.2 percentage point lower than April's print.
May's core PCE reading, an important economic measure for the Federal Reserve, marked the lowest annual rate since March 2021; that was the first time inflation topped the central bank's 2% target in this economic cycle.
Consumer Sentiment was lower month-to-month in June at a reading of 68.2, the University of Michigan's Surveys of Consumers showed on Friday, but came in ahead of expectations as consumers became more optimistic towards short-term inflation.
One-year outlooks declined to 3% from May's reading of 3.3%. However, the five-year outlook remained unchanged at 3% for the third straight month.
"While consumers exhibited confidence that inflation will continue to moderate, many expressed concerns about the effect of high prices and weakening incomes on their personal finances," said Joanne Hsu, director of Surveys of Consumers, in a statement. "These trends offsets the improvements in the short- and long-run outlook for business conditions stemming in part from expectations for softening interest rates."
"Still, sentiment is current about 36% above the trough seen in June 2022," Hsu added.
On the Earnings Front:
Nike
The company now expects fiscal 2025 sales to fall in the mid-single digits, compared to previous guidance for sales growth. Nike also expects sales in the first half of the year to decline in the high single digits, compared to its prior outlook of low-single digit decreases.
"A comeback at this scale takes time," CFO Matthew Friend said on an earnings call with analysts on Thursday. "Although the next few quarters will be challenging, we are confident that we are repositioning Nike to be more competitive with a more balanced portfolio to drive sustainable, profitable, long-term growth."