SOTS 2nd Hour: Tariffs Latest, PCE Takeaways, & JPMorgan’s Retail Playbook 5/30/25

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Sara Eisen (0:50)

Good Friday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. We're under a little pressure this morning. The S&P's down half a percent. The only thing working sector-wise are the defensives, like utilities and consumer staples. Those are higher, everybody else is lower. Some concerns about trade and what might happen next between the US and China. Technology is getting hardest hit. Information technology down 1%.

However, it's shaping up to be a positive week, up 1.4% for the S&P 500 and month as we are at the end of the month here, up almost 6% for the S&P and 9% for the NASDAQ composite during the month. Let's take a look at treasuries here. As you can see, we're seeing some buying and yields are lower, 4.4 on the 10-year, 2-year below 4%. We got some new, I would say, benign inflation data this morning for the month of April, which we'll talk about in just a moment. This morning, President Trump posting on Truth Social about those China trade talks, quote, so much for being Mr. Nice Guy. We'll have a live report from Beijing with how the Chinese government is responding. Plus, Lizanne Saunders of Charles Schwab is here with her playbook, Amid All the Tariff Uncertainty and the Key Economic Report. She says she'll be watching next week.

Carl Quintanilla (2:04)

Let's get some consumer data to finish up the week with Rick Santelli. Hey, Rick.

Rick Santelli (2:08)

Yes, University of Michigan sentiment, Carl. These are our final May read, which means we'll take our mid-month and toss it. They are all sequentially higher and better than expected. Headline moves from 50.8 to 52.2. 52.2, that would be the best since March of this year, April, equaled 52.2. 58.9 on current conditions, up from 57.6. 58.9, best since April. If we look at expectations, what lies ahead, 47.9 in the rear view mirror, 46.5. It is below 50, though, and 47.9. Well, consider this, we haven't been above 50 since March of this year, so 47.9 would be the second worst going back two months. Finally, the inflation numbers, probably the most important day to hear. A big reversal, but still lofty levels. 7.3 was our mid-month for one year. That was the highest going back to 1981 It moves to 6.6, which of course would be the highest since 1981 as well. 4.6 on the 5-10 year moves down to 4.2. 4.2, well, that would be the hottest going back to March when it was 4.1. The 4.6 that we tossed out, that was the highest since September of 1990

We see interest rates move in a smidge lower on that data but not a lot and do remember that on surveys they're a bit squishy so these numbers may be a bit exaggerated. I would expect them to start coming down over the next several months. Sara, back to you.

Sara Eisen (3:48)

Okay, Rick, thank you. University of Michigan saying, at least we ended four consecutive months of plunging declines in consumer sentiment and actually that sentiment picked up following the temporary pause on some tariffs on Chinese goods so continue to see these mood swings from the consumer. We got the big inflation report this morning. This is the Fed's preferred measure of PCE prices and the good news is 2.1% was the number. We're getting awfully close to the Fed's 2% preferred target. That was better than 2.3% the month before and if you look on a monthly basis, it was only an increase of 0.1%.

So it was as expected. David, we knew that we weren't going to get a surge of inflation because we saw CPI for the month. Either companies have built up enough inventories where they don't have to pass on the higher prices yet. They're absorbing it in their own margins. Whatever it is, we're just not seeing a big increase yet in prices. That's, you know, in the Trumpy Powell.