Stocks tumbled last week as traders weighed the potential impact of newly proposed legislation and escalating trade tensions. The U.S.’s threats of new tariffs on the European Union and Apple sparked renewed concerns, which sent equities broadly lower. All major indexes posted losses, with the S&P 500 falling more than 2.5% and the Russell 2000 shedding nearly 3.5%. Long-term bond yields rose despite the sell-off in stocks, as the 10-year Treasury hit a three-month high of 4.64% before closing the week at 4.51%. Crude oil prices logged their first weekly loss in May amid growing expectations that OPEC+ could announce another output increase. Meanwhile, the dollar index dropped to a two-week low, while investors sought refuge in gold, pushing its price nearly 5% higher.
Last Week’s Economic News
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- Existing-home sales fell slightly in April, the second consecutive monthly decline, and are down 2.0% from April 2024. The median existing-home price rose to $414,000, the highest ever recorded for the month of April and the 22nd straight month of year-over-year gains.
- New single-family home sales surged in April and were up 3.3% compared to a year ago. The median sales price of new homes was $407,200—up from March but 2.0% below April 2024. The average sales price climbed to $518,400, up for the month and 3.6% year-over-year.
- The national average retail price for regular gasoline $3.173 per gallon as of May 19, $0.411 below the price one year earlier.
- For the week ending May 17, initial unemployment claims totaled 227,000, down 2,000 from the previous week. The insured unemployment rate remained unchanged at 1.2% for the week ending May 10. Continuing claims rose by 36,000 to 1,903,000.
Eye on the Week Ahead
This week brings the second estimate of first-quarter gross domestic product. The initial report showed a contraction of 0.3%, marking the first negative quarter since 2022. Investors will also review the April Personal Income and Outlays report to assess the state of consumer spending and inflation. March data showed a 0.7% increase in spending and flat consumer prices.
Have a nice week!
Sincerely,
Robert G. Carpenter