Well, let's see what signals the American economy sent by the evening of May 6, 2025. If we imagine it as a complex mechanism or even a weather station, the readings today were, to put it mildly, diverse and not always optimistic.
Let's start with the main 'people's forecaster' – the Economic Optimism Index from RealClearMarkets/TIPP. In May, this barometer clearly showed reduced pressure, crashing down to 47.9 points. This is the lowest level in seven months, hinting that Americans have started to look at the economic future with a noticeable degree of caution. Assessments of both overall prospects for six months and personal financial situations have all declined. Well, this is all logical: when there is economic fog outside, it is hard to expect sunny weather in one's own pocket.
But here is where the weather anomalies begin: confidence in the economic policy of the authorities... has increased! From 46.7 to 47.6. This index is still in the 'pessimistic' zone (below 50), and has been there longer than most of us remember. But the mere fact of growth amid general gloom is like seeing the sun breaking through the clouds, which, however, is still not warming anything. Perhaps this is just a manifestation of resilience, or the people decided that since things haven't gotten worse (which they could have!), this is already a reason for cautious optimism towards the steersmen.
The bond market also experienced its own 'weather' phenomena today. The yield on key 10-year U.S. Treasury bonds fell slightly, dropping to 4.32%. This was aided by an auction where the Federal Reserve, acting as the main 'weather regulator' in the financial markets, bought nearly $15 billion worth of bonds. Yes, within the framework of 'quantitative tightening,' sometimes such 'little rains' are necessary to prevent too severe a drought (read: liquidity shortage).
The U.S. stock markets today resembled a ship caught in a turbulence zone. Major indices – S&P 500, Nasdaq, and Dow Jones – ended the trading day lower. Why? The market is currently very sensitive to any changes in the 'economic weather.'
One reason is the trade news. They come like sudden gusts of wind, changing direction without warning and causing investors to hold on tighter. The ambiguous rhetoric regarding tariffs and trade agreements creates that very 'fog of uncertainty' in which it is difficult to make long-term plans.
Additionally, mixed economic data resembles a contradictory weather forecast for the weekend: sunshine is promised (good labor market data), but there are warnings of possible storms (GDP contraction in the first quarter, rising trade deficit hinting at disruptions due to tariffs).
As a result, the picture of the American economy by the evening of May 6 looked like this: the consumer barometer is falling, the financial 'sky' has slightly cleared thanks to the Fed's actions, but the stock market feels gusts of headwinds from trade news and confusion in economic indicators. All these signals are like readings from instruments at a weather station before a serious forecast. And everyone is curious about what 'forecast' the main economic forecasters will announce today.