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Friday Afternoon Coffee - Markets Update - 16 May 2025 - Wall Street Slips on Weak Data, But Global Stocks Hold Weekly Gains; Oil Recovers
- The Trade Academy Team
- May 16
- 3 min read
Markets Update: Wall Street ended lower Friday following soft U.S. economic data, though global equities remained on track for a strong weekly finish. Oil prices rebounded, helping ease inflation concerns and supporting broader markets.
Global Markets Roundup: 16 May 2025
Consumer Sentiment Slumps as Inflation Expectations Rise
U.S. consumer confidence deteriorated in May, with the University of Michigan’s sentiment index dropping to 50.8—well below expectations—as Americans grew increasingly uneasy about President Donald Trump’s erratic trade policy. Notably, one-year inflation expectations surged to 7.3%, the highest since November 1981. The data added to a string of weak indicators, including softer housing starts and disappointing core retail sales. Producer prices also fell unexpectedly in April, increasing expectations of Fed easing later this year.
Wall Street Dips, But Weekly Gains Intact
Despite Friday's losses, major U.S. stock indexes are still up sharply for the week, lifted by solid corporate earnings and hopes for improved trade relations between the U.S. and China. Dow Jones Industrial Average: -0.03% to 39,634.15. S&P 500: -0.07% to 5,278.07. Nasdaq Composite: -0.27% to 16,414.84.
MSCI’s global equity gauge slipped 0.09% on the day, but remains on track for a positive week. Analysts cited ongoing optimism from a 90-day U.S.-China tariff truce and intensified trade talks between Washington and Brussels. The STOXX 600 rose 0.13%, marking its fifth consecutive weekly gain. In Asia, MSCI’s benchmark of stocks excluding Japan climbed over 3% this week.
Treasury Yields Drop on Soft Data
U.S. 10-year Treasury yields fell 2.2 basis points to 4.48%, extending Thursday’s drop as weaker economic data spurred safe-haven demand and tempered expectations of near-term Fed tightening.
Dollar Rises on Import Price Surprise, Set for Weekly Gain
The U.S. dollar rose, bolstered by a 0.1% increase in import prices—unexpectedly higher due to rising capital goods costs—despite cheaper energy.
The greenback is poised for its fourth consecutive weekly advance.
Gold Falls Sharply
Gold dropped 2.12% to $3,171.20 an ounce, erasing the previous session’s gains as the dollar firmed. The metal is still near historic highs amid lingering global volatility.
Oil Rebounds After Midweek Slump
Oil prices rebounded Friday after tumbling midweek on news of a possible OPEC+ supply increase and Iranian deal prospects. Still, both Brent and WTI crude were set to close the week in positive territory. WTI Crude (CL1!): +$0.87 to $62.49/barrel. Brent Crude (BRN1!): +$0.88 to $65.41/barrel. Low energy prices continue to support the broader narrative of easing inflation.
Commodities Mixed
Arabica coffee futures hovered around $3.81/lb amid improved Brazilian harvest prospects. The IBGE raised its 2025 Arabica production forecast by 3.5% to 37 million bags, though still below 2024 levels. Cocoa surged toward $10,570/tonne, nearing three-month highs on ongoing concerns about West African supply disruptions.
Grains declined:
Soybeans (ZS1!): -$0.01 to $10.50¼/bushel. Corn (ZC1!): -2¼ cents to $4.46¼/bushel. Wheat (ZW1!): -8¾ cents to $5.24/bushel. Soybeans had touched a 10-month high midweek before dropping sharply on Thursday.
Outlook
With weak U.S. economic data clouding the path forward, investors will continue watching for clarity on trade policy and signals from the Fed. Market expectations now favor a 67.1% chance of a rate cut by September, though recent Fed commentary suggests policymakers remain in wait-and-see mode.
Looking forward, refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
