WS #7954

The dominant signal in this window is a sharp deterioration in consumer sentiment and inflation expectations, cross-corroborated by the University of Michigan Surveys of Consumers final May data. Sentiment plunged to 44.8 (consensus 48.2, prior 49.8), while 1-year inflation expectations rose to 4.8% (prelim 4.5%) and 5-year expectations jumped to 3.9% (prelim 3.4%). This stagflationary surprise is a bearish signal for consumer discretionary and growth stocks, and bullish for inflation hedges. Separately, the Iran geopolitical narrative remains elevated: Rubio stated 'we're not there yet' on a deal and mentioned a 'Plan B' if Iran doesn't reopen the Strait of Hormuz, while Iran rejected US nuclear deal talks. Pakistan's Field Marshal is traveling to Tehran to mediate, but the risk of escalation persists. The Conference Board LEI inched up 0.1% vs -0.1% expected, a modest positive. Fed's Waller expressed increased concern about lasting inflation from energy prices, supporting a pause in rate cuts. Dell surged ~12% after Wells Fargo raised PT, driven by AI server demand. IBM's best week since 2002 continues on the $1B quantum deal. UP Fintech (TIGR) was fined ~$207.4M by Chinese regulators, a significant negative for Chinese ADRs. The Iran narrative is ESCALATING in risk terms, while the consumer sentiment data is a new bearish development.