Markets
Stocks were mixed last week as investors fretted over hot inflation reports, which offset gains in chipmaker stocks.
The Standard & Poor’s 500 Index rose 0.13 percent, while the Nasdaq Composite Index edged down 0.08 percent. The Dow Jones Industrial Average lost 0.17 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.77 percent.1,2
Volatile Week
Stocks ticked up to start the week, helping the S&P 500 close above 7,400 for the first time. The Nasdaq also closed at a new high as chipmaker stocks continued to lead the tech sector.3
Markets opened lower on Tuesday after the Consumer Price Index (CPI) report came in hotter than expected. Stocks pared losses by the close, with the Dow Industrials managing to notch a slight gain.4
The rally continued, with the S&P and Nasdaq hitting new intraday and closing records over the next two trading days. On Thursday, a strong Q1 report from a mega-cap tech company helped pace gains while investors kept one eye on the ongoing U.S.-China meetings. The S&P 500 closed above 7,500 for the first time, while the Dow reclaimed the 50,000 level.5,6
Stocks were under pressure from the opening bell on Friday. Treasury yields rose as the three-day summit between U.S. and Chinese leaders came to a close. Investors seemed disappointed that there were no major agreements regarding the Middle East conflict.7
Inflation in Focus — One of the I’s
Both retail and wholesale inflation rose faster than expected in April, heavily influenced by higher energy prices.
The CPI increased 3.8 percent year over year in April, up from 3.3 percent in March. Fuel oil alone climbed 54 percent year over year, while gasoline jumped 28 percent. In fact, over 40 percent of the 0.6 percent month-over-month gain was driven by energy inflation.8
Inflation also showed up in wholesale prices. The Producer Price Index rose 6 percent over the prior 12 months in April, also a three-year high. Month over month, PPI rose 1.4 percent (a four-year high) versus the 0.5 percent increase expected.
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