Friday’s report from the US government showed that growth in spending by consumers weakened by more than economists expected. Growth in incomes for Americans also slowed last month.
Such numbers show businesses “need to prepare for an environment where consumers are not splurging like they were last year,” according to Jeffrey Roach, chief economist for LPL Financial.
After the report, the yield on the 10-year Treasury fell to 4.50 per cent from 4.55 per cent late Thursday. It had topped 4.60 per cent earlier in the week amid worries about tepid demand following some auctions for Treasurys, a move that had hurt stocks.
The two-year Treasury yield, which more closely tracks expectations for Fed action, slipped to 4.87 per cent from 4.93 per cent late Thursday.
Virtually no one expects the Federal Reserve to cut interest rates at its next meeting in a week and a half. But traders are betting on a nearly 85 per cent probability that the Fed will cut at least once by the end of the year, according to data from CME Group.
Stocks in industries that tend to benefit the most from easier interest rates helped lead the market Friday. Real-estate stocks in the S&P 500 jumped 1.9 per cent as a group for one of the biggest gains among the 11 sectors that make up the index. Boston Properties rose 4.3 per cent.
On the losing end of Wall Street were several tech stocks.
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Dell tumbled 17.9 per cent even though it matched analysts’ forecasts for profit in the latest quarter. Its stock had already soared 122 per cent in 2024 ahead of the report, meaning expectations were very high, and analysts pointed to concerns about how much profit Dell is squeezing out of each dollar in revenue.
Nvidia fell for a second straight day, losing 0.8 per cent, as its momentum finally slows after soaring more than 20 per cent since its blowout profit report last week. The chip company was one of the heaviest weights on the S&P 500 Friday. But its soaring profits and ability to keep a frenzy going on Wall Street for the entire artificial-intelligence technology industry were also huge reasons for the index’s 4.8 per cent gain for May.
Trump Media & Technology Group slumped 5.3 per cent in its first trading following the conviction of Donald Trump on felony charges Thursday. The company, which runs the Truth Social platform, had warned earlier in filings with US securities regulators that a conviction of Trump could hurt it.
MongoDB dropped 23.9 per cent despite topping forecasts for profit and revenue. The database company for developers gave forecasts for profit in the current quarter and for this full year that fell short of analysts’ expectations.
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Source Agencies
