Stock Market Today: Stocks Slip as Consumer Sentiment Slides
Concerns about the debt ceiling also weighed on stocks Friday.


Stocks opened Friday in positive territory, but the price action quickly shifted after a worse-than-expected reading on consumer sentiment.
Also weighing on Wall Street's mood was lingering debt ceiling uncertainty after a meeting between the White House and congressional leaders was delayed until next week.
The University of Michigan said its consumer sentiment index plunged to 57.7 in May from April's 63.5, cutting in half the gains it has made since hitting an all-time low of 50 last June. "While current incoming macroeconomic data show no sign of recession, consumers' worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff," the report said. Meanwhile, year-ahead expectations for the economy fell 23%, while long-term expectations dropped 16%.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"In addition to deteriorating sentiment and current conditions, expectations plunged to the lowest levels since July," says Edward Moya, senior market strategist at currency data provider OANDA. "The consumer is becoming rather grim and if inflation expectations [which, on a long-term basis, hit their highest level since 2011 this month] continue to remain elevated, that could force the Fed to tighten more."
The latest debt ceiling headlines indicated a meeting between the White House and congressional leaders was pushed from today to next week so that discussions could continue among staffers, said House Speaker Kevin McCarthy. Treasury Secretary Janet Yellen said earlier this month that the U.S. could default on its financial obligations as early as June 1 if the debt limit is not raised.
"The debt ceiling debate is a big downside risk to the economy," says Bill Adams, chief economist at Comerica Bank. "Bonds issued by the Treasury are a basic building block of the American financial system. Nobody can predict what happens if those blocks all crack at the same time." Adams adds that the deterioration in consumer sentiment will hopefully nudge lawmakers in the right direction, but if the government does end up defaulting, "it won't be pretty."
Tesla drops on Twitter CEO news
Ten of the 11 sectors finished lower, with consumer discretionary stocks seeing outsized losses. This was due in part to Tesla (TSLA) stock, which, after being up nearly 3% in early trading, fell 2.4% by the close following CEO Elon Musk's announcement that he hired former head of NBCUniversal's advertising unit Linda Yaccarino to be the new CEO of Twitter. Musk said he will transition to executive chair and chief technology officer of the social media platform.
Still, Wedbush analyst Daniel Ives sees the move as "a positive development for Tesla as well as SpaceX with Musk needing to spend more and more time on these golden child platforms rather than Twitter."
As for the major indexes, the Dow Jones Industrial Average shed 0.03% to 33,300, the S&P 500 finished down 0.2% at 4,124, and the Nasdaq Composite lost 0.4% to 12,284.
Powell, retail earnings on tap
So what's in store for next week? Debt ceiling headlines will likely spark plenty of chatter on Wall Street. Additionally, investors will weigh several key economic reports – including Monday's Empire State manufacturing index – and sift through an onslaught of speeches from Federal Reserve officials in an attempt to see what the central bank's future plans for interest rates might be. Most notably is a Friday morning speech from Fed Chair Jerome Powell.
There are also several major retailers on next week's earnings calendar, which could give clues to how rising prices are impacting consumers' spending behavior.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
The Y Rule of Retirement: Why Men Need to Plan Differently
If you have a Y chromosome (because you're a guy), following the 'Y rule of retirement' can help you transition to this new life stage with grace.
-
Retire on This Island for Mediterranean Living on the Cheap
This independent nation has a lower cost of living and more visa options than many of its Mediterranean cousins.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market Today
The last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
-
How to Invest for a Fall Interest Rate Cut by the Fed
A lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Are Buffett and Berkshire About to Bail on Kraft Heinz Stock?
Warren Buffett and Berkshire Hathaway own a lot of Kraft Heinz stock, so what happens when they decide to sell KHC?
-
Dow Bleeds Red Due to Big Blue: Stock Market Today
Six of the official GICS sectors were in the green, led by communications services, technology and energy stocks.
-
How the Stock Market Performed in the First 6 Months of Trump's Second Term
Six months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have Today
Berkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have Today
Procter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.