From Investing.com: 2025-05-19 03:05:00

Wall Street saw gains thanks to a trade war truce, but sentiment soured late in the week. Consumer sentiment deteriorated, with the NFIB small business optimism index hitting its lowest level since 2024. The University of Michigan Preliminary Data showed a sharp drop to 50.8, the lowest since 2022. Rising tariffs and trade policy uncertainty are major concerns, with 75% of consumers mentioning tariffs as a worry. Inflation expectations rose to 7.3%, the highest since 1981. Small businesses are getting more pessimistic about the economy, with future expectations plummeting 37 percentage points to 15%.

In the week ahead, the Reserve Bank of Australia is expected to lower its cash rate, while China’s economic data is expected to show growth in retail sales and steady fixed-asset investment. Japan’s data may weaken due to US tariffs, while the Euro Area’s manufacturing sector is showing strength. The US housing market remains unaffordable, leading to slow sales of new and existing homes. The EU-UK summit focuses on defense partnership and economic issues. Inflation data will be closely watched, with services inflation expected to be lower than forecasted.

The US Dollar Index struggled to build on gains following the US-China trade truce. US data did little to assist, with the index hovering around resistance levels. Rumors of potential trade deal announcements could provide a boost for the index. The lack of data next week may require another catalyst for the bulls to take control and push for further gains.



Read more at Investing.com: Markets Weekly Outlook: RBA, PBoC Decisions and UK Inflation in Focus