North America News NASDAQ Ends Lower After Meta Pullback; Dow and S&P Push Higher Major US equity indexes closed mixed on Thursday, as a sharp reversal in Meta stock dragged down the NASDAQ, even while the Dow Jones and S&P 500 continued to climb. Meta’s stock fell sharply to $643.88, down $15.48 or -2.35%, after news broke that the company would delay its flagship Llama 4 AI model. Earlier in the session, the stock had traded up by nearly $3.89 before the negative report surfaced. As Meta tumbled, the NASDAQ Composite lost steam and finished down 34.49 points (-0.18%) at 19,112.32. It had been up as much as 60.41 points intraday before the selloff. Meanwhile: Weekly Performance (so far): Investors will now look ahead to Friday’s close to gauge weekly strength across the board, with tech volatility likely to stay elevated as more firms report AI developments and earnings. Atlanta Fed GDPNow Tracker Ticks Higher for Q2 The Atlanta Fed’s GDPNow model revised its Q2 2025 growth estimate to 2.5%, up from the previous 2.3%. The upward adjustment reflects firmer economic data and moderate resilience in both business activity and consumer spending, despite ongoing trade uncertainty and monetary tightening. In their own words: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.5 percent on May 15, up from 2.3 percent on May 8. After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, and the Federal Reserve Board of Governors, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 3.3 percent and 1.2 percent, respectively, to 3.7 percent and 1.5 percent. US Producer Prices Post Surprise Drop in April April PPI came in +2.4% y/y, just below the +2.5% consensus. But the month-on-month figures showed a shock drop of -0.5%, far weaker than the +0.2% expectation. Core details: Notably: This sharp pullback suggests pipeline inflation pressures are easing—at least for now. US Retail Sales Advance in April April’s retail sales rose by +0.1%, beating the flat consensus. The prior month saw a strong +1.5% gain. Details: Category movers: While the headline surprised slightly on the upside, the control group decline suggests core consumption is losing momentum. U.S. Jobless Claims Stable at 229K Initial jobless claims in the U.S. matched expectations at 229,000 for the latest week. The prior reading was revised up to match at 229,000. This data shows labor market conditions remain tight but are beginning to normalize from ultra-low levels seen earlier this year. 30-Year Mortgage Rates Tick Higher as New Builds Gain Appeal Freddie Mac’s 30-year mortgage rate rose to 6.81%, up slightly from 6.76% the previous week. Rates have held in a narrow range between 6.7% and 6.9% for months, maintaining elevated borrowing costs. Housing market snapshot: Despite high rates, builders are gaining traction by cutting prices and offering incentives, while tight inventory in the resale market continues to prop up home values. US Homebuilder Sentiment Drops Sharply in May The NAHB housing market index for May dropped to 34, well below the expected 40 and down from 40 in April. Sentiment among US homebuilders is deteriorating as higher borrowing costs and affordability challenges weigh on new demand. Details: This marks the latest sign that persistent mortgage rate pressure is souring the outlook in the residential construction sector. US Business Inventories Lag Forecasts in March Business inventories rose just 0.1% in March, slightly below the 0.2% forecast and a slowdown from February’s +0.2% pace. Data from the US Census Bureau provided further insights into inventory and sales activity. Key data: Retail inventory gains signal businesses are rebuilding stock despite flat overall inventory growth. Philadelphia Fed Business Index Rises But Activity Mixed The Philly Fed manufacturing index improved to -4.0 in May, far stronger than the expected -11.0, and up sharply from April’s dismal -26.4. Highlights: Six-month expectations surged: This suggests a possible demand boom is coming—potentially resembling the post-COVID rebound dynamic. New York Manufacturing Declines Again, But Orders Rebound The Empire State Manufacturing Index fell for the third month in a row, hitting -9.2 in May, slightly better than the -10.0 expected. Key takeaways: Six-month outlooks showed improved optimism: The data paints a mixed picture: current conditions remain soft, but forward-looking indicators suggest a possible rebound. U.S. Industrial Output Flatlines in April Industrial production in the United States stalled in April, posting 0.0% growth versus expectations for a +0.2% increase. March data was revised higher from +0.3% to +0.4%. Manufacturing output contracted by -0.4%, underperforming both forecasts and the prior month’s gain. These figures suggest that the industrial sector may be cooling after earlier signs of recovery. Markets Eye April PCE After Tame CPI Print Expectations are building for a mild April reading on Core PCE, the Fed’s preferred inflation metric. WSJ’s Nick Timiraos noted that forecasts are trending lower following this week’s CPI release, although upcoming PPI and import price data may shift the outlook. While inflation indicators are moving in the right direction, many warn that these are lagging metrics. Markets are pricing in stronger growth due to easing trade tensions, which has driven Treasury yields higher. The implication: inflation could resurface, complicating the Fed’s path to rate cuts. Meta Delays Launch of “Behemoth” Llama 4 Model Amid Internal Struggles Meta Platforms has postponed the release of its highly anticipated Llama 4 large language model, known internally as “Behemoth,” due to ongoing internal concerns about its effectiveness and readiness, according to a report from The Wall Street Journal. Originally slated for an April 2025 debut, the AI model is now not expected until fall or later. Engineers familiar with the project have raised flags about underwhelming performance gains versus previous iterations, prompting top executives to rethink the structure of the AI division responsible for the model. Despite public claims that Behemoth would outperform its rivals, insiders say Meta tailored earlier Llama models for benchmark tests and overstated real-world performance. Two
