Stock Market Update

[BRIEFING.COM] The broader market remains modestly lower after the Fed released its May Beige Book this afternoon. The report showed overall economic activity increased at a slight to moderate pace across most Federal Reserve Districts, though consumer spending remained uneven and increasingly divided by income level. Higher-income households continued to spend despite higher prices, while middle and lower-income consumers faced growing affordability pressures, leading to increased credit card usage, fewer retail visits, and stronger demand for necessities. Auto sales softened due to higher vehicle and fuel costs, while manufacturing activity improved across most Districts. Banking conditions remained generally stable, although rising delinquencies in residential mortgages, consumer loans, and agricultural lending were noted in several regions. Agriculture remained under pressure from higher fuel and fertilizer costs, while energy activity increased modestly but producers remained cautious amid ongoing uncertainty. Business outlooks for the next six months were little changed, as elevated uncertainty and signs of weakening consumer demand weighed on sentiment. Currently, the S&P 500 (-0.49%) is in "first" place, only down 37 points with more aggressive losses being had elsewhere.

Overall, economic expectations were largely unchanged, with businesses citing persistent uncertainty and softer consumer demand as key factors limiting confidence in future growth.

• Employment: Employment was largely unchanged across Districts, with manufacturing providing the strongest hiring support. Hiring remained selective and focused on critical roles, while wage growth stayed modest to moderate amid ongoing economic uncertainty.
• Prices: Prices increased at a moderate-to-strong pace, with higher energy costs driving inflation across shipping, groceries, packaging, and fertilizer. Rising input costs continued to outpace selling prices, putting pressure on margins and limiting firms' ability to pass through higher expenses.

Currently, the yield on the benchmark 10-yr Treasury note is little changed following the Beige Book release, is up five basis points to 4.492%.