Markets swung after hot CPI print

The Bureau of Labor Statistics reported on May 12 that the Consumer Price Index rose 0.6% in April and 3.8% from a year earlier, with core CPI up 0.4% on the month and 2.8% on the year. A day later, the agency said the Producer Price Index for final demand rose 1.4% in April, above the prior month’s 0.7% increase. By Friday, May 15, U.S. stocks had turned lower as Treasury yields climbed and investors reassessed interest-rate expectations. Google Finance showed the Dow Jones Industrial Average closed down 537.29 points, the S&P 500 fell 92.74 points and the Nasdaq Composite lost 410.08 points. ### Which inflation reports set off the move? The Bureau of Labor Statistics said April CPI was released on Tuesday, May 12, and showed consumer prices rising 0.6% on a seasonally adjusted basis after a 0.9% increase in March. The 12-month increase in all-items CPI accelerated to 3.8% from 3.3% in March, while the core index excluding food and energy rose 2.8% from a year earlier. Energy prices rose 3.8% in April and accounted for more than 40% of the monthly increase, the agency said. (bls.gov) The Bureau followed on Wednesday, May 13, with a producer-price report that showed final-demand PPI rising 1.4% in April. The BLS release said that followed a 0.7% increase in March and set the next PPI release for June 11. ### What happened in stocks on Friday, May 15? Google Finance showed the Dow closed at 49,526.17, down 537.29 points, while the S&P 500 ended at 7,408.50, down 92.74 points, and the Nasdaq closed at 26,225.14, down 410.08 points. (bls.gov) The same market summary said major U.S. indexes fell from record highs as a surge in Treasury yields and oil prices weighed on sentiment. (bls.gov) The move matched broader market coverage on May 15 that described equities retreating as yields rose and technology shares came under pressure. The user-provided claim that the S&P 500 briefly moved above 7,500 could not be independently verified from the sources reviewed, but the index’s Friday close was below that level. ### How far did Treasury yields move? (google.com) CNBC reported on May 12 that the 10-year Treasury yield rose more than 4 basis points to 4.459% after the CPI release, while the 2-year yield rose to 3.989% and the 30-year bond yield reached 5.023%. Bloomberg reported on May 13 that the 10-year yield climbed to the highest level since July and that 30-year yields traded above 5% after the PPI report. (google.com) Google Finance’s May 15 market summary said the 30-year Treasury yield reached 5.13% and the 10-year note climbed to 4.6% as investors adjusted to higher inflation readings. Schwab’s market update on Friday also said the 10-year note yield spiked to 4.55%, the highest in a year, during early trading. ### What did the data change in rate expectations? (cnbc.com) CNBC reported that fed funds futures after the May 12 CPI release priced in a greater chance of a Federal Reserve rate increase later this year. The outlet said the probability of one quarter-point hike by the end of December rose to 25% from 21.5% a day earlier, citing the CME FedWatch tool. (google.com) Chris Rupkey, chief economist at FWDBONDS, told CNBC that the inflation report was “another nail in the coffin” for expectations of a rate cut this year. That interpretation was his, not the government’s, but it reflected the repricing taking place across bonds and stocks after the back-to-back CPI and PPI releases. (cnbc.com) ### What comes next on the calendar? The Bureau of Labor Statistics says the next Consumer Price Index release, for May 2026 data, is scheduled for June 10 at 8:30 a.m. Eastern. The agency says the next Producer Price Index release, also for May 2026 data, is scheduled for June 11 at 8:30 a.m. Eastern. (bls.gov) (cnbc.com)