In This Article:
By Chris Prentice and Stella Qiu
NEW YORK/SYDNEY (Reuters) -Wall Street was lower on Friday though global equities were still poised for weekly gains, as upbeat earnings helped sustain the rally sparked by a U.S.-China trade truce.
Oil prices remain relatively low, further supporting stocks and bonds.
U.S. consumer sentiment slumped further in May as one-year inflation expectations surged as households remained concerned about the economic impact of President Donald Trump's aggressive and often erratic trade policy, a University of Michigan survey showed.
Yields on U.S. Treasuries fell after data showed weaker housing starts than expected.
Wall Street's main indexes were lower on Friday, but were still on track for a robust weekly gain. MSCI's gauge of stocks across the globe retreated 0.09%.
The Down Jones Industrial Average fell 0.03%, the S&P 500 retreated 0.07% and the Nasdaq Composite was down 0.27%.
It had largely been a positive week for global equity markets, as investors cheered a tariff truce between the United States and China that greatly reduces the risk of a global recession.
"The risk-on mood is still here on markets," said Nabil Milali, strategist Multi-Asset & Overlay at Edmond de Rothschild, also pointing to news that the European Union and the U.S. have agreed to intensify talks on a possible trade agreement, and a better-than-expected earnings season.
"The fact that we have more positive surprises is a very good thing for European stocks."
The pan-European STOXX 600 index rose 0.13% and was set for its fifth straight week of gains.
U.S. import prices unexpectedly rose in April as a surge in the cost of capital goods offset cheaper energy products.
"We are in the early stages of a trade transition. As of April, the impacts are unclear; however, we know that uncertainty pushed residential builders off balance," said Jeffrey Roach, Chief Economist for LPL Financial in Charlotte, North Carolina, on import prices and housing and building data.
MSCI's main gauge of Asia-Pacific stocks ex-Japan rose more than 3% this week, and the S&P 500 is up 4.5% so far.
Oil prices have been choppy this week, rising on the U.S.-China deal, before falling 2% on Thursday on increased supply pressure from an OPEC+ output hike and the prospect of an Iranian nuclear deal.
Brent futures recovered slightly on Friday, and were set to end the week higher. [O/R]
Oil prices - low by recent standards - are helping support expectations that inflation is easing, as is Thursday's U.S. data, which did not show any dramatic impact from U.S. tariffs, helping both shares and bonds.