Week of 05/06-05/10 Stock Market Slows Down, Remains Close To All-Time Highs

Another volatile week of earnings ended in a stock market slowdown as consumer sentiment slides to a 6-month low. The Dow rose 102 points, or 0.3%. The S&P 500 climbed about 0.1%, while the Nasdaq Composite shed 0.1%. The latest economic data survey for consumer sentiment from the University of Michigan released on Friday indicated lower than expected results, which sparks the debate of when interest rate cuts should happen amid recent signs of a cooling labor market. Overall, we have a seen a strong earnings season along with some soft labor data, which make investors optimistic about the Fed's confidence to cut rates multiple times this year. Markets may remain on hold until Wednesday’s highly anticipated update on U.S. inflation at the consumer level (CPI and Core CPI Report). This month's cooler-than-expected jobs and jobless claims reports suggest the U.S. economy could pull off the tricky balancing act of staying solid enough to avoid a sharp recession, but not so strong that it worsens inflation.

What is the difference between PCI and PCE?

The Personal Consumption Expenditures index (PCE) and the Personal Consumption Expenditures Price Index (PCI) are both measures of inflation used by the US Federal Reserve and other economic institutions. The CPI measures the change in the out-of-pocket expenditures of all urban households and the PCE index measures the change in goods and services consumed by all households, and nonprofit institutions serving households. This means that the PCE Price Index provides a more comprehensive measure of inflation than the PCI. Additionally, the PCE has a broader scope than the PCI, as it measures all consumer goods and services, while the PCI only includes goods and services that consumers purchase directly.