US open: Markets rangebound as consumer confidence drops
By Benjamin Chiou
Date: Friday 16 May 2025
(Sharecast News) - US stock markets opened with marginal gains on Friday as investors refrained from taking on too much risk following the recent rally, with upside limited by a much worse-than-expected reading of consumer confidence.
At 1000 ET, the University of Michigan revealed that the consumer sentiment index unexpectedly fell to 50.8 in May, down from 52.2 in April and well below the 53.4 pencilled in by economists. This was the lowest level for the gauge since June 2022.
Markets held on to their gains following the data, though trading was mostly rangebound, with the Dow up just 0.1% and the S&P 500 and Nasdaq both up 0.2%.
The three benchmark indices have gained 2.6%, 4.5% and 6.6% over the past four trading sessions, respectively, with sentiment boosted by last weekend's agreement between the US and China to lower tariffs for 90 days as the two powerhouses continue trade negotiations.
Meanwhile, billion-dollar AI deals between Saudi Arabia and a bunch of American chip and server manufacturers gave the tech-heavy Nasdaq an extra lift.
Investors have largely shrugged off a raft of mixed economic data and gloomy comments on Thursday from Walmart's boss, who said that consumers should expected price rises - as a direct result from trade tariffs - to kick in as soon as this month.
In other economic data, US building permits fell 4.7% to 1.41m last month, according to the Census Bureau, hitting their lowest level in 11 months and missing the consensus forecast of 1.45m.
Housing starts, meanwhile, rose 1.6% over the month of April to 1.36m, following a 10.1% drop in March. However, that was still 1.7% below last year's levels and under analysts' estimates of 1.37m.
Market movers
Microsoft was in the red after offering a series of new concessions to the European Commission on Friday, in a bid to settle a long-running antitrust investigation into the bundling of its Teams communications app with Office 365. Its proposal reportedly included unbundling Teams from its Office and Microsoft 365 software suites, offering those products at a lower price without Teams, and enhancing interoperability for rival services.
Shares in Charter Communications jumped on the news that the cable company will merge with competitor Cox Communications.
Meanwhile, Corona and Modelo maker Constellation Brands was higher on the news that Berkshire Hathaway doubled its stake in the beer and wine producers.
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