The US stock market lost steam in mid-morning trading on Friday as consumer sentiment hit a six-month low, causing investors to pause and reassess the market’s direction.
The Dow Jones Industrial Average (^DJI) managed to hold onto gains of roughly 0.2%, while the S&P 500 (^GSPC) hovered above the flatline after closing above 5,200 for the first time in a month. The Nasdaq Composite (^IXIC) declined around 0.1% as well.
The latest University of Michigan consumer sentiment survey released on Friday revealed a significant 13% drop in overall sentiment during the month of May. The index reading for the month came in at 67.4, its lowest level in six months, and well below economist expectations of 76.2.
Investors are closely monitoring the future of interest rate cuts amid recent signs of a cooling labor market. Federal Reserve officials are scheduled to speak on Friday, including Michelle Bowman, Neel Kashkari, and Austan Goolsbee, to provide more insight into the timing and pace of any potential easing in policy.
On the corporate front, TSMC (TSM) shares surged after the Taiwanese contract chipmaking giant reported a 60% increase in sales for April, driven by sustained demand for AI and a revival in consumer electronics like smartphones.
Overall, the market’s reaction to the drop in consumer sentiment reflects the growing concerns about inflation, interest rates, and the overall economic outlook. Investors will be closely watching for any further developments that could impact market sentiment and direction in the coming days.
