The Day Ahead: Markets Eye Consumer Confidence and Tariff Impact Today

Market Overview

U.S. equity futures traded slightly higher early Friday, extending a strong weekly rally powered by easing U.S.-China tariff tensions and cooler inflation prints. As of 09:20 GMT, S&P 500 futures were up 0.24% at 5,947, Nasdaq 100 futures rose 0.24% to 21,452, and Dow Jones futures gained 0.33% to 42,526.

The S&P 500 rose 0.41% Thursday, now up 4.5% for the week. The Dow added 0.65%, and the Nasdaq dipped 0.18% as tech leaders cooled after outsized gains earlier in the week. Traders remain focused on the interplay between temporary trade relief and longer-term inflation policy as the week wraps.

Key Economic Releases

At 12:30 GMT, several key reports drop:

• Housing Starts (April): Consensus 1.42M, prior 1.46M
• Building Permits (April): Consensus 1.47M, prior 1.46M
• Import Prices (April): Consensus +0.3% MoM, prior +0.4%

At 14:00 GMT, the University of Michigan Consumer Sentiment Index (May, preliminary) is due, with a consensus of 76.5, down from 77.2 in April. This will be closely watched for signs of demand resilience as tariff-related input cost concerns rise.

Notable Earnings

Pre-market reports include:

• Flowers Foods (FLO) – expected EPS: $0.38
• RBC Bearings (RBC) – expected EPS: $2.71

These names aren’t index movers but may provide read-throughs for consumer and industrial sentiment.

Central Bank Activity

Fed Chair Jerome Powell warned Thursday that persistent supply shocks may keep real interest rates elevated and inflation more volatile than in the prior decade. He signaled no near-term return to low-rate policy as the Fed re-evaluates its framework.

San Francisco Fed President Mary Daly speaks at 21:40 GMT. As a voting member, her tone will be scrutinized for alignment with Powell’s long-term caution or any short-term divergence.

Technical Outlook

The S&P 500 is sustaining gains above the 50-day (5,592) and 200-day (5,877) SMAs, with the next resistance at 6,236.50.

Nasdaq 100 futures remain bullish, holding above 21,452 and key support at 20,710, with a technical target of 22,656.

Dow futures are testing resistance at 42,563, with the 200-day SMA at 43,041 marking the breakout trigger.

Outlook: Consumer Confidence Holds the Keys to Market Continuation or Pullback

Markets remain in a bullish short-term posture, driven by easing trade friction and softer inflation signals. However, today’s University of Michigan Consumer Sentiment Index is the pivotal data point. With a consensus of 76.5, a downside surprise could challenge the rally by signaling weakening household confidence just as tariffs threaten to pressure prices again. Conversely, a resilient print would reinforce the market’s current upward momentum and support the case for sustained consumer-driven growth.

Powell’s long-term warning about persistent supply shocks and structurally higher real rates adds complexity, but it’s not an immediate headwind. Instead, sentiment data will set the tone. A weak consumer read may trigger reassessment of earnings sustainability, especially in discretionary and retail sectors already warning of margin pressure. With sentiment now central to the economic outlook, the market’s next move hinges on whether consumers are still willing—and able—to spend through uncertainty.

More Information in our Economic Calendar.