We got a hot April Consumer Price Index (CPI) number, driven in a big way by energy costs, but even core CPI was surprisingly high, driven by a jump in shelter costs for the first time in a while.
The April Producer Price Index (PPI) was even further above estimates
On May 12th, the market staged a meaningful pullback after the CPI print but was in recovery mode by midday on the 13th, with a big bounce in semiconductors and the Dow closing in the green. Interest rates rose materially. The PPI print, which left the year-over-year (YoY) headline PPI at a very uncomfortable +6.0%, the highest since February 2023, has had a much more muted impact.
The whole market dipped into the red on the PPI print, but the NASDAQ and S&P were back in the green after the first hour of trading. Semiconductors, the QQQ, and the Magnificent 7 finished trading on the 13th in the green, while the Dow and equal weight S&P 500 were only down slightly. This market wants to trade up, even with a 30-year U.S.