Wall Street Keeps Rising               05/22 15:23

   The split between Wall Street and most U.S. households grew wider Friday as 
U.S. stocks rose to the finish of their eighth straight winning week, the best 
such streak since 2023. 

   NEW YORK (AP) -- The split between Wall Street and most U.S. households grew 
wider Friday as U.S. stocks rose to the finish of their eighth straight winning 
week, the best such streak since 2023. That's even though a survey showed U.S. 
consumers are feeling even worse about the economy.

   The S&P 500 added 0.4% and pulled closer to its all-time high set in the 
middle of last week. The Dow Jones Industrial Average rose 294 points, or 0.6%, 
and the Nasdaq composite gained 0.2%.

   Ross Stores helped drive the market and rose 8.1% after the off-price 
retailer reported profit and revenue for the latest quarter that easily cleared 
analysts' expectations. CEO Jim Conroy said it saw strong customer traffic 
through the three months, and the company may have benefited from households 
spending their tax refunds.

   Estee Lauder jumped 11.9% after saying it was no longer considering a 
possible merger with Puig, the Spanish fragrance and beauty products company.

   Workday rose 5.2%, and Zoom Communications jumped 9.2% after both delivered 
better profit reports for the latest quarter than analysts expected.

   They're the latest companies to top analysts' expectations for earnings for 
the start of 2026, and the cavalcade of such reports has helped U.S. stocks 
remain near their records. Stock prices tend to follow the path of corporate 
profits over the long term.

   The strength is coming even after a survey of U.S. consumers by the 
University of Michigan found sentiment fell to a record low, piercing below a 
bottom in 2022 when inflation peaked above 9%. Households are feeling worried 
about how bad inflation is now because of expensive oil created by the war with 
Iran.

   U.S. consumers are forecasting inflation will worsen to 4.8% in the coming 
12 months, up from a forecast of 4.7% last month, according to the survey. In 
the longer run, their forecasts for inflation jumped to 3.9% from 3.5% last 
month. Such rising expectations are a concern for economists because they can 
drive behavior that creates a vicious cycle that makes inflation worse.

   Sentiment dropped in particular for lower-income consumers who are least 
able to absorb higher costs for essentials, and it fell for Republicans as 
well, according to the survey.

   Helping to keep uncertainty high have been continued swings for oil prices. 
They yo-yoed again Friday, like they did through the week on uncertainty about 
when the United States and Iran may find a deal to reopen the Strait of Hormuz. 
The closure has prevented oil tankers from exiting the Persian Gulf and 
delivering crude to customers worldwide.

   The price for a barrel of Brent crude oil to be delivered in August added 
0.7% to settle at $100.21 after erasing an earlier decline.

   Worries about inflation staying high have pushed bond yields higher 
worldwide, threatening to slow economies and undercut prices for stocks and all 
kinds of other investments. High yields have already forced the average 
long-term U.S. mortgage rate to its most expensive level since last summer, and 
they could curtail companies' borrowing to build the AI data centers that have 
supported the U.S. economy's growth recently.

   Yields had been down Friday morning, offering some relief, before wavering 
after oil prices erased their losses and the survey on consumer sentiment 
showed worsening inflation expectations.

   The yield on the 10-year Treasury edged down to 4.56% from 4.57% late 
Thursday, but it remains well above its 3.97% level from before the war.

   Worries about inflation have climbed so high that traders on Wall Street 
have eliminated bets that the Federal Reserve will resume its cuts to interest 
rates later this year. Lower rates would give the economy a boost, but they 
could also worsen inflation.

   An important member of the Fed, Gov. Christopher Waller, said in a speech 
Friday, "If I believe inflation expectations start to become unanchored, I 
would not hesitate to support an increase in the target range for the federal 
funds rate."

   But he also said that is not the case now in his speech titled "Policy Risks 
Have Changed." Instead, he said it "is time to simply sit and watch how the 
conflict and the data evolve."

   In stock markets abroad, indexes rose across Europe and Asia.

   Japan's Nikkei 225 climbed 2.7% to another record after a report showed 
inflation hitting a four-year low in April, at 1.4%, despite higher prices for 
oil and gas due to the war.

   On Wall Street, the S&P 500 rose 27.75 points to 7,473.47. The Dow Jones 
Industrial Average added 294.04 to 50,579.70, and the Nasdaq composite added 
50.87 to 26,343.97.