The S&P 500 struggled for direction this week following the release of encouraging inflation data and a weaker-than-expected consumer sentiment report.
On Wednesday, the U.S. Labor Department reported the consumer price index gained 4.9% in April, down from 5% in March and below the 5% inflation economists were expecting. Core CPI inflation, which excludes volatile food and energy prices, was up 5.5%, matching average economist estimates.
On Friday, the University of Michigan reported U.S. consumer sentiment dropped 9.1% on a monthly basis in May and is down 1.2% from a year ago. Consumer sentiment fell to its lowest level since November, while consumers' inflation expectations for the next year ticked lower from 4.6% to 4.5%.
On Thursday, PacWest said its deposits dropped 9.5% in the first week of May, sending the stock down 22% and triggering more volatility in U.S. regional bank stocks. Regional bank stocks have been pressured since March, when concerns over rising interest rates led to a run on deposits at several banks, including Silicon Valley Bank, Signature Bank and First Republic.
On Thursday, President Joe Biden delayed a meeting with top congressional leaders to negotiate a debt ceiling agreement until early next week. If Congress doesn't agree to boost the debt limit, the U.S. government faces a potential default as soon as June 1.
Electric shock
Nikola shares tumbled Tuesday after the electric vehicle maker reported a first-quarter net loss of $169 million and said the company is “refocusing” on North American fuel-cell trucks, autonomous vehicle technology and hydrogen refueling.
In the week ahead, investors will get more quarterly reports from Cisco Systems and TJX Companies on Wednesday and Alibaba Group Holding and Walmart on Thursday.
Analysts are expecting S&P 500 companies to report a 5.7% earnings decline in the second quarter, according to FactSet.
Economic numbers
Following the April CPI inflation data, Wall Street will get more economic updates on Tuesday when Eurostat releases its preliminary Eurozone GDP growth estimate for the first quarter and the U.S. Census Bureau releases its April Retail Sales report.
Benzinga is a financial news and data company headquartered in Detroit.
This article originally appeared on Detroit Free Press: Biden delays meeting with congressional leaders to negotiate debt ceiling deal