Stocks were mixed on Friday, as investor sentiment was supported only by the fragile two-week ceasefire between the United States and Iran and two new consumer economic readings weighed on outlooks.
The Dow Jones Industrial Average
Despite some losses, all three major averages ended the week in the green, with the Nasdaq outperforming with gains of 4.7%. The Dow and S&P 500 also rose 3% and 3.6%, respectively, for the week.
Impacting outlooks, March's consumer price index (CPI) reading showed inflation coming in-line with expectations, according to the Commerce Department's Friday report. Headline inflation rose by a seasonally adjusted 0.9% on the month and 3.3% annually -- driven primarily by the 10.9% surge in energy prices.
Excluding energy costs, core CPI increased just 0.2% on the month and 2.6% year-over-year in March -- both readings came in below economist expectations and moved closer to the Federal Reserve target inflation rate of 2%.
"We believe the Fed will look through the energy-driven noise so long as these factors hold," said Alexandra Wilson-Elizondo, global co-CIO of multi asset solutions at Goldman Sachs Asset Management, quoted by CNBC. "The Fed has room to be patient, and every reason to do so. Today's number buys the Fed time, but the real test lies ahead."
Separately, the University of Michigan's preliminary consumer sentiment reading for April showed Americans expect inflation to soar to 4.8% over the next year, jumping a full percentage point from March's final reading.
Headline consumer confidence also fell 10.7% from March to 47.6 in the first two weeks of April, due to these increased inflation expectations.
"Open ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy," said Joanne Hsu, director of the Surveys of Consumers, in a statement. "Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated.
