Stocks took a breather as the S&P 500 fell -2.6% last week. While all eleven sectors were in the red, energy stocks got hit the hardest. Meanwhile, international developed markets were positive.
Rates continued their ascent as the 30-year yield breached 5.00% for the first time since 2023. The curve steepened with the 10-year yield closing the week at 4.51% while shorter-term yields were more stable.
A weak Treasury auction was a catalyst for higher rates. Elsewhere, April existing home sales disappointed and the U.S. House passed a spending bill ahead of Memorial Day weekend.
A look ahead
Inflation data will highlight the economic calendar as the Federal Reserve’s preferred inflation gauge, Core Personal Consumption Expenditures (PCE), is set to be released. Investors will also keep a close eye on inflation expectations in the U. of Michigan Consumer Sentiment data.
The second reading of Q1 GDP is on the docket. The advance estimate showed the economy contracted -0.3% year over year in Q1; this would mark the first quarter GDP declined since 2022.
Economic releases: Q1 GDP, Pending Home Sales, Core PCE, U. Mich. Consumer Sentiment.
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