Top proxy adviser Institutional Shareholder Services on Friday recommended Tesla shareholders vote against the reapproval of CEO Elon Musk’s $56 billion pay package and withhold their support from the re-election of News Corp. scion James Murdoch to the automaker’s board.

Tesla’s shareholder meeting is on June 13.

The report, a copy of which was obtained by CNBC, comes after the other influential proxy adviser service, Glass Lewis, also recommended shareholders vote against Musk’s pay package. Tesla’s board is seeking shareholder approval to reinstate Musk’s pay after a Delaware court voided the package earlier this year.

ISS said “cautionary” shareholder support was merited for Tesla’s plans to reincorporate out of Delaware and into Texas, although the proxy adviser also warned that there are concerns over how Tesla’s board decided to reincorporate and over the “unknown” nature of Texas’s business law framework.

The proxy adviser recommended support for some shareholder proposals that Tesla management opposes, including one that would declassify Tesla’s board. A classified or staggered board is considered by some advisers to be an effective defense against a takeover bid.

“At a mega-cap company like Tesla, what is perhaps even more relevant to shareholders is that a staggered board can hinder shareholders from holding directors accountable for poor responsiveness,” ISS said of its support for the declassification proposal.

Tesla has been courting shareholder support in both time-tested and novel ways. The company engaged communications firm FGS Global and proxy solicitor Innisfree M&A to win votes, and has bolstered apparent grassroots support from its large network of social-media influencers. The company also launched a website, VoteTesla.com, and has offered shareholders the chance to win a tour of Tesla’s Gigafactory facility in Austin.

Tesla seeks shareholder approval for Musk’s payday and concurrently to reincorporate out of Delaware and into Texas. The company has characterized the Delaware chancery court ruling that overturned Musk’s stock package as unfriendly to shareholders, noting the value that Musk has created for investors.

“Over the last several years it has become clear that Delaware is no longer the right jurisdiction for us,” Tesla chair Robyn Denholm said in a letter to shareholders earlier this week.

Tesla has adopted tactics other companies have used in contested shareholder meetings, whipping votes and launching a concerted public-relations effort to win support. While Tesla is not facing any sort of meaningful organized opposition to its efforts to reincorporate or re-approve Elon’s pay package, some shareholders have come out against it. Billionaire Leo KoGuan has repeatedly said he will vote against the package. KoGuan says he owns around 0.75% of Tesla shares, worth around $4.9 billion.

ISS and its smaller peer Glass Lewis are an important factor in how shareholders decide to cast their votes at annual elections. Their recommendations are closely watched in contested situations but are not definitive calls. Still, they have developed a reputation for being important bellwethers and seek to advocate for shareholders.

They’ve also been the direct target of Musk’s ire. Earlier this year on an earnings call, he compared ISS to the terrorist organization ISIL, also known as ISIS. Musk also said they “effectively control the stock market” on X in 2023, saying they had outsize influence over so-called “passive” or institutional shareholders.

Institutional shareholders like BlackRock and Vanguard, however, do not always vote with ISS recommendations. While voting decisions are generally not disclosed until well after a shareholder meeting, those institutional shareholders have due diligence teams that help them decide how to cast the millions of shares they manage on behalf of their investors.

ISS in its report said its prior concerns over the pay package, which dates back to 2018, had not been mitigated and that it “remains excessive,” noting that “the board has effectively only offered shareholders an ‘all or nothing’ option in this vote.”

The proxy adviser alluded to Musk’s myriad other business ventures such as social media platform X, his AI startup xAI and SpaceX, as another reason why Tesla shareholders should not support the pay package.

“The grant, in many ways, failed to achieve the board’s other original objectives of focusing CEO Musk on the interests of Tesla shareholders, as opposed to other business endeavors, and aligning his financial interests more closely with those of Tesla stockholders,” ISS said.

Inflation rose about as expected in April, with markets on edge over when interest rates might start coming down, according to a measure released Friday that is followed closely by the Federal Reserve.

The personal consumption expenditures price index excluding food and energy costs increased just 0.2% for the period, in line with the Dow Jones estimate, the Commerce Department reported.

On an annual basis, core PCE was up 2.8%, or 0.1 percentage point higher than the estimate.

Including the volatile food and energy category, PCE inflation was at 2.7% on an annual basis and 0.3% from a month ago. Those numbers were in line with forecasts.

Fed officials prefer the PCE reading over the more closely followed consumer price index, which the Labor Department compiles. The Commerce Department measure accounts for changes in consumer behavior such as substituting less expensive items for costlier alternatives, and has a wider scope than the CPI.

“The core index came in at 2.8%. That’s fine, but it’s been trading in a range for five months now, and that’s pretty sticky to me,” said Dan North, senior economist for North America at Allianz Trade. “If I’m [Fed Chair Jerome] Powell, I’d like to see that start moving down, and it’s barely creeping. … I’m not reaching for the Pepto yet, but I’m not feeling great. This is not what you want to see.”

A 1.2% rise in energy prices helped push up the headline increase. Food prices posted a 0.2% decline on the month.

Goods prices rose 0.2% while services saw a 0.3% increase, continuing a normalization trend for an economy in which services and consumption provide much of the fuel.

Along with the inflation reading, Friday’s release included data about income and spending.

Personal income increased 0.3% on the month, matching the estimate, while spending rose just 0.2%, below the 0.4% estimate and off March’s downwardly revised 0.7%. Adjusted for inflation, the spending numbers showed a 0.1% decline, due in large part to a 0.4% decrease in spending on goods and just a 0.1% rise in services expenditures.

Market reaction following the release saw futures tied to major stock averages rising while Treasury yields moved lower.

“The PCE Price Index didn’t show much progress on inflation, but it didn’t show any backsliding, either. Based on the initial reaction in stock index futures, the market will see it mostly as a positive,” said Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley.

“Investors will have to remain patient, though,” he added. “The Fed has suggested it will take more than one month of favorable data to confirm inflation is reliably moving lower again, so there’s still no reason to think a first rate cut will come any earlier than September.”

As inflation data has come in hotter than expected, central bank officials have encouraged a cautious approach. That means less likelihood that they will be cutting rates anytime soon.

Most recently, New York Fed President John Williams said Thursday that while he is confident inflation will continue to recede, prices are still too high and he has not seen sufficient progress on moving to the Fed’s 2% annual goal.

Markets have reined in their expectations for rate reductions this year. Pricing Friday morning indicated a probability that the first move likely won’t come until November, at the Fed’s meeting that concludes two days after the presidential election.

The Dow Jones Industrial Average jumped Friday for its best session of the year, as investors wrapped up a strong month after the Federal Reserve’s preferred inflation measure came in largely around expectations.

The blue-chip Dow climbed 574.84 points, or 1.51%, to 38,686.32, lifted by Salesforce and UnitedHealth’s respective advances of 7.5% and 2.8%. The S&P 500 added 0.80% to 5,277.51. The Nasdaq Composite ticked lower by 0.01% to 16,735.02, as Nvidia and a few other megacap technology stocks took a hit.

The S&P 500 and Nasdaq snapped five-week win streaks with slides of 0.51% and 1.1%, respectively. The blue-chip Dow slipped 0.98%, marking a second straight week of losses.

Despite the tough week, it was a winning May, with each of the major benchmarks registering a sixth positive month in seven. The Dow added 2.3% this month, while the S&P 500 rose 4.8%. The Nasdaq gained 6.88%, notching its best month going back to November.

“The market is going to remain choppy,” said Quincy Krosby, chief global strategist at LPL Financial, citing variables such as the upcoming election, Treasury yields and consumer spending. “There are questions as to: Where are we headed? Where’s the economy headed?”

A chunk of May’s strength can be attributed to a surge in Nvidia, which released blockbuster earnings last week. Though the artificial intelligence darling’s stock fell about 0.8% on Friday, shares ended the month nearly 27% higher. Tesla and Netflix also pulled back on Friday, hurting the tech-heavy Nasdaq in the session.

Closely followed economic data released Friday morning came mostly in line with forecasts. The core personal consumption expenditures price index increased 0.2% in April, the same figure that was anticipated by economists polled by Dow Jones. Core PCE rose 2.8% on an annualized basis, slightly above the 2.7% prediction from economists.

“This week’s most important economic data came and went without deviating much from expectations,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, adding that the market breathed a “sigh of relief” after the report.

Traders also reacted to the latest corporate earnings results. Dell Technologies tumbled more than 17% despite strong earnings after saying its AI server backlog was smaller than anticipated. Cloud security stock Zscaler popped 8.5%, while developer data platform MongoDB plunged almost 24%. Apparel retailer Gap jumped more than 28%.

The pace of hiring remains strong for lower-earning Americans, holding steady above its pre-pandemic baseline even as the demand for higher-income workers has waned slightly, according to new data from Vanguard.

The hires rate for the bottom third of workers by income (who earn less than $55,000 a year) was 1.5% in March, where it has largely hovered since September 2023, according to a new Vanguard analysis.

The hires rate gauges the number of new hires as a share of existing employees.

By comparison, it was lower — about 1.2% to 1.3% — in the months leading up to the Covid-19 pandemic, Vanguard found.

“This is partly a reflection of lower-paying service industries still trying to recover from the COVID shock — a challenge since many of those workers have transitioned to higher-paying opportunities,” Adam Schickling, a senior Vanguard economist, said in the analysis.

Vanguard is among the nation’s largest 401(k) plan administrators. Its analysis is based on new enrollments in its 401(k) plans.

Meanwhile, higher earners have seen hiring decline modestly.

Workers with incomes of $55,000 to $102,000 saw their hiring rate decline to 0.5% in March from 0.6% in September; those earning over $102,000 saw it fall more, to 0.4% from 0.6% during that time, Vanguard said.

Higher-paying industries are “taking a considerably more cautious approach to hiring relative to the hectic 2021 to 2022 hiring surge,” Schickling said.

Conversely, hiring has boomed in sectors like health care and hospitality, which tend to be lower-paying industries, said Julia Pollak, chief economist at ZipRecruiter.

For example, there’s been significant demand for home-care givers, certified nursing assistants, medical technicians, patient transporters and other hospital jobs, she said. The health-care field has added more than 750,000 total jobs over the last year, a “huge, huge number” and about triple its pre-pandemic growth, Pollak added.

The pandemic also created a “FOMO economy” that led to a surge in travel spending and therefore increased demand for jobs in hotels and other accommodation gigs, Pollak added.

“And these jobs can’t be automated,” perhaps insulating such workers from the leaner staffing that can result from company experimentation with artificial intelligence, she said.

The job market has broadly cooled since 2022 from its scorching pace after the U.S. economy reopened.

The U.S. Federal Reserve raised interest rates to their highest level in two decades to pump the economic brakes and rein in inflation. It’s unclear when they might reduce borrowing costs.

However, the labor market remains strong and resilient by many metrics — and may be strengthening, Pollak said.

“I think a lot of the data points to a pretty hot 2024,” Pollak said. “The slowdown we saw in 2023 has not continued. Things have either stabilized or ticked up.”

Certain tailwinds seem to be propelling the labor market forward. For one, the “much anticipated recession” didn’t materialize, and companies that took a wait-and-see approach regarding hiring and business investment now feel more confident about growing again, Pollak said.  

Additionally, 2024 is the start of “peak retirement,” she said. The largest cohort of baby boomers is poised to reach age 65 between now and 2030.

This means companies must recruit a big wave of next-generation talent to replace those departing workers, Pollak said.

However, risks remain in the near term.

Job openings have declined substantially from their pandemic-era peak, though remain elevated from historic levels. Such a sharp decline in job openings without a corresponding jump in unemployment “is unprecedented, singular, and exceptional” in the post-war era, Nick Bunker, economic research director for North America at job site Indeed, wrote earlier this month.

“But it’s not clear how much longer this miraculous trend can continue,” he wrote.

New York Federal Reserve President John Williams on Thursday said inflation is still too high, but he is confident it will start decelerating later this year.

With markets on edge over the direction of monetary policy, Williams offered no clear indication of his position on possible interest rate cuts. Instead, he reiterated recent positions from the central bank that it has seen a “lack of further progress” toward its goals as inflation readings have been mostly higher than expected this year.

“The honest answer is, I just don’t know,” Williams said during a Q-and-A session with CNBC’s Sara Eisen before the Economic Club of New York. “I do think that monetary policy is restrictive and is bringing the economy a better balance. So I think at some point, interest rates within the US will, based on data analysis, eventually need to come down. But the timing will be driven by how well you achieve your goals.”

Williams called the policy “well-positioned” and “restrictive” and said it is helping the Fed achieve its goals. Regarding potential rate hikes, he said, “I don’t see that as the likely case.”

Earlier this year, markets had expected aggressive rate cuts from the Fed this year. But higher-than-expected inflation readings have altered that landscape dramatically, and current pricing is pointing to just one decrease, probably in November.

“With the economy coming into better balance over time and the disinflation taking place in other economies reducing global inflationary pressures, I expect inflation to resume moderating in the second half of this year,” Williams said. “But let me be clear: Inflation is still above our 2% longer-run target, and I am very focused on ensuring we achieve both of our dual mandate goals.”

For nearly a year, the Fed has been in a holding pattern, keeping its benchmark borrowing rate between 5.25% and 5.5%, the highest in more than 23 years.

The Fed is seeking to keep the labor market strong and bring inflation back to its 2% target. Most inflation indicators are near 3% now, and a key reading from the Commerce Department is due Friday.

Inflation as measured through the Fed’s preferred yardstick — the personal consumption expenditures price index — is expected to come in at 2.7% for April, according to the Dow Jones estimate. Williams said he expects PCE inflation to drift down to 2.5% this year on its way back to 2% in 2026.

“We have seen a great deal of progress toward our goals over the past two years. I am confident that we will restore price stability and set the stage for sustained economic prosperity. We are committed to getting the job done,” he said.