P.M. Edition for May 16. The University of Michigan’s preliminary consumer-sentiment index fell to 50.8 in May. WSJ economics reporter Chao Deng says the data surprised economists, and reflect fears of higher prices driven by sweeping tariffs. And higher education reporter Sara Randazzo says President Trump’s funding cuts have delivered a broad hit to universities from the Ivy League to state schools. Plus, Boeing will avoid prosecution over violating an earlier criminal settlement under a tentative deal with the Justice Department. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the latest trends in U.S. consumer sentiment?
The totality of these cuts is going to mean that there's more than just the research that has to be hit because a lot of the infrastructure for this research still exists and needs to be funded.
And how a tentative deal with the Justice Department could spare Boeing from a guilty plea over 737 MAX charges. It's Friday, May 16th. I'm Pierre Bien-Aimé for The Wall Street Journal, filling in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Consumer sentiment in the U.S. has fallen to the second lowest number on record.
The University of Michigan said its preliminary index of consumer sentiment for May fell to 50.8, a roughly 3 percent drop from April. American households felt worse about the economy, with sweeping tariffs raising the prospect of higher prices. Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60 percent in April.
Respondents said they expect prices to surge 7.3% over the next year, compared with expectations in April for a 6.5% increase. The survey also noted that longer-run inflation expectations rose too, reflecting an especially big monthly jump among Republicans. Wall Street Journal economics reporter Zhao Deng.
It appears that American households are worried about inflation caused by tariffs. And this was actually a surprise to economists because the survey was taken during a period when the White House rolled back several tariffs, including the extremely high ones on China. The closing of the survey came two days after the China tariffs were decreased.
So it could have been that respondents didn't really get a chance to reflect that change. And so while it's a disappointing report, many economists are holding out to see what the final reading for sentiment in May will look like. Respondents will continue to weigh some of the back and forth tariff announcements. And then also we had Walmart announcing just this week
that it's going to raise prices on its products this month and in early summer. That's another factor that consumers are going to be thinking about and that could push down sentiment in the final read for May.
Major U.S. indexes rose today, led by the Dow, which added 332 points, or 0.8%. The S&P rose 0.7%, and the Nasdaq Composite advanced 0.5%. And for the week, the S&P 500 finished up 5.3%, the Nasdaq Composite rose 7.2%, while the Dow gained 3.4%. Charter Communications has reached a deal to buy Cox Communications for $21.9 billion. The combined company will change its name to Cox Communications.
The merger will bring together two of the biggest broadband and cable operators in the U.S. at a time when cable giants are being squeezed from all sides, given tough competition from wireless carriers, frozen government subsidies for a Biden-era broadband construction program, and the decline of cable TV. And Boeing won't be prosecuted over violating an earlier criminal settlement.
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Chapter 2: How are funding cuts impacting universities?
Chapter 3: What role do tariffs play in consumer expectations?
that it's going to raise prices on its products this month and in early summer. That's another factor that consumers are going to be thinking about and that could push down sentiment in the final read for May.
Major U.S. indexes rose today, led by the Dow, which added 332 points, or 0.8%. The S&P rose 0.7%, and the Nasdaq Composite advanced 0.5%. And for the week, the S&P 500 finished up 5.3%, the Nasdaq Composite rose 7.2%, while the Dow gained 3.4%. Charter Communications has reached a deal to buy Cox Communications for $21.9 billion. The combined company will change its name to Cox Communications.
The merger will bring together two of the biggest broadband and cable operators in the U.S. at a time when cable giants are being squeezed from all sides, given tough competition from wireless carriers, frozen government subsidies for a Biden-era broadband construction program, and the decline of cable TV. And Boeing won't be prosecuted over violating an earlier criminal settlement.
A tentative deal with President Trump's Justice Department would allow the aerospace company to avoid being labeled a felon. According to people familiar with the matter, Boeing would receive a non-prosecution agreement instead of having to plead guilty, which it had agreed to do toward the end of the Biden administration.
The case stems from Boeing's admission that former employees deceived air safety regulators before two deadly crashes of 737 MAX jets in 2018 and 2019 killed 346 people. The lawyers for the families are expected to formally object to a non-prosecution agreement. The Justice Department didn't immediately respond to a request for comment.
House Republican spending hawks blocked the party's giant tax and spending bill today, delivering President Trump a setback over disagreements on Medicaid, clean energy tax breaks, and budget deficits. The holdouts stopped the Budget Committee from advancing the legislation.
The delay throws at least a temporary wrench in House GOP leaders' hopes to keep dissent in the party at bay, ahead of a self-imposed deadline of May 26th or Memorial Day. Meanwhile, Binance's billionaire founder Chengpeng Zhao, widely known as CZ, is pushing for a pardon from President Trump.
We exclusively report that three top Democratic senators are asking the administration to detail its interactions with the crypto exchange's founder. Zhao served four months in prison last year after pleading guilty to violating anti-money laundering requirements.
Wall Street Journal reporter Amrith Ramkumar told our tech news briefing podcast that the letter is the latest inquiry into potential conflicts of interest in the crypto industry, given the first family's financial ties to Binance.
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Chapter 4: How is Boeing avoiding prosecution?
How do you create a market out of thin air? How do you get the largest technology merger over the finish line? Learn more at FTI Consulting. Experts with impact.
President Trump's funding cuts are hitting home for universities from the Ivy League to state schools. Trump has pulled or threatened to pull billions of federal research dollars. He signed an executive order cracking down on foreign funding. And his fellow Republicans in Congress are considering higher taxes on endowment funds.
Here to tell us about the effects of all that is Sarah Randazzo, who covers higher education for the journal. Sarah, what kind of hit have universities taken from this so far?
When these funding cuts first started to come around back in March, a lot of schools did really basic things like saying hiring freezes or just look at your spending, be a little more careful, surface level things. As the months have gone on for schools, particularly like Columbia and Harvard that have had
really large sums of money pulled, they're now having to do, you know, some pretty substantial cutbacks. And so in Harvard School of Public Health, for instance, which is almost half funded with federal research dollars, they've had to do layoffs.
They're doing austerity measures that include no coffee in the lounge anymore, no more ordering food for lunch, cutting back printers and physical desktop phones, even little things like that. And then We have other places that are doing some layoffs or pausing research or saying that cuts could be coming. So it's a real gradient depending on how much each university relies on that money.
And you write that the financial hit goes beyond what President Trump has pulled specifically. How is that?
That's what a lot of schools are analyzing right now. But the totality of these cuts is going to mean that there's more than just the research that has to be hit because a lot of the infrastructure for this research still exists and needs to be funded. Buildings, some staffing, just things that they won't be able to cut related to the research.
And so that means that they'll have to look elsewhere to make all the numbers work.
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Chapter 5: What are the effects of President Trump's policies on higher education?
Chapter 6: How are inflation expectations changing among consumers?
It appears that American households are worried about inflation caused by tariffs. And this was actually a surprise to economists because the survey was taken during a period when the White House rolled back several tariffs, including the extremely high ones on China. The closing of the survey came two days after the China tariffs were decreased.
So it could have been that respondents didn't really get a chance to reflect that change. And so while it's a disappointing report, many economists are holding out to see what the final reading for sentiment in May will look like. Respondents will continue to weigh some of the back and forth tariff announcements. And then also we had Walmart announcing just this week
that it's going to raise prices on its products this month and in early summer. That's another factor that consumers are going to be thinking about and that could push down sentiment in the final read for May.
Major U.S. indexes rose today, led by the Dow, which added 332 points, or 0.8%. The S&P rose 0.7%, and the Nasdaq Composite advanced 0.5%. And for the week, the S&P 500 finished up 5.3%, the Nasdaq Composite rose 7.2%, while the Dow gained 3.4%. Charter Communications has reached a deal to buy Cox Communications for $21.9 billion. The combined company will change its name to Cox Communications.
The merger will bring together two of the biggest broadband and cable operators in the U.S. at a time when cable giants are being squeezed from all sides, given tough competition from wireless carriers, frozen government subsidies for a Biden-era broadband construction program, and the decline of cable TV. And Boeing won't be prosecuted over violating an earlier criminal settlement.
A tentative deal with President Trump's Justice Department would allow the aerospace company to avoid being labeled a felon. According to people familiar with the matter, Boeing would receive a non-prosecution agreement instead of having to plead guilty, which it had agreed to do toward the end of the Biden administration.
The case stems from Boeing's admission that former employees deceived air safety regulators before two deadly crashes of 737 MAX jets in 2018 and 2019 killed 346 people. The lawyers for the families are expected to formally object to a non-prosecution agreement. The Justice Department didn't immediately respond to a request for comment.
House Republican spending hawks blocked the party's giant tax and spending bill today, delivering President Trump a setback over disagreements on Medicaid, clean energy tax breaks, and budget deficits. The holdouts stopped the Budget Committee from advancing the legislation.
The delay throws at least a temporary wrench in House GOP leaders' hopes to keep dissent in the party at bay, ahead of a self-imposed deadline of May 26th or Memorial Day. Meanwhile, Binance's billionaire founder Chengpeng Zhao, widely known as CZ, is pushing for a pardon from President Trump.
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Chapter 7: What are the implications of the Dow's performance?
And so the senators were really asking Trump administration officials what the discussions have been like with CZ and his lawyers and the timing of those conversations and how they relate to other things going on. So the specific letter was used to focus on the push for a pardon, but there are these larger Binance concerns swirling in the background.
The White House has said there are no conflicts of interest. For more from Amrith, listen to today's episode of Tech News Briefing. Coming up, the Trump administration's funding cuts to universities are already starting to bite. That's after the break.
How do you create a market out of thin air? How do you get the largest technology merger over the finish line? Learn more at FTI Consulting. Experts with impact.
President Trump's funding cuts are hitting home for universities from the Ivy League to state schools. Trump has pulled or threatened to pull billions of federal research dollars. He signed an executive order cracking down on foreign funding. And his fellow Republicans in Congress are considering higher taxes on endowment funds.
Chapter 8: What is the significance of the tentative deal with the Justice Department?
Here to tell us about the effects of all that is Sarah Randazzo, who covers higher education for the journal. Sarah, what kind of hit have universities taken from this so far?
When these funding cuts first started to come around back in March, a lot of schools did really basic things like saying hiring freezes or just look at your spending, be a little more careful, surface level things. As the months have gone on for schools, particularly like Columbia and Harvard that have had
really large sums of money pulled, they're now having to do, you know, some pretty substantial cutbacks. And so in Harvard School of Public Health, for instance, which is almost half funded with federal research dollars, they've had to do layoffs.
They're doing austerity measures that include no coffee in the lounge anymore, no more ordering food for lunch, cutting back printers and physical desktop phones, even little things like that. And then We have other places that are doing some layoffs or pausing research or saying that cuts could be coming. So it's a real gradient depending on how much each university relies on that money.
And you write that the financial hit goes beyond what President Trump has pulled specifically. How is that?
That's what a lot of schools are analyzing right now. But the totality of these cuts is going to mean that there's more than just the research that has to be hit because a lot of the infrastructure for this research still exists and needs to be funded. Buildings, some staffing, just things that they won't be able to cut related to the research.
And so that means that they'll have to look elsewhere to make all the numbers work.
What have you been hearing from some of the people in charge?
The dean of Harvard's Faculty of Arts and Sciences, her name's Hopi Hoekstra, she had a meeting with faculty earlier this month and she said, quote, these federal actions have set in motion changes that will not be undone, at least not in the foreseeable future.
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