The nervousness has resurfaced on Wall Street after the CPI was published at 2:30 PM, with prices rising more than expected. Investors are choosing the greenback as a safe haven instead of T-Bonds or “defensive” stocks from the S&P500 (such as Vertex or Humana). The “$-Index” climbs 0.45% to 98.4, reaching its levels from May 5th.
The dollar gains ground notably against the Euro (0.45% to 1.1730), the Swiss Franc (0.55% to 0.7820), and especially against the Pound (0.7% to 1.3510), which is suffering from political uncertainties in the UK, with a vulnerable Keir Starmer. The pound is losing ground against all currencies, including the Yuan (-0.75%), which is edging up by 0.05% on the eve of Donald Trump’s state visit to China (Yuan = $6.7920).
This increase in the greenback is weighing down on Gold, which falls by -2% to $4,665, and Silver (-3.5% to $84.20).
The highlight of this session was the publication of the American CPI: unsurprisingly, the rise in oil and its derivatives fueled the increase in prices for consumption in the United States. They rose slightly more than expected last month, reaching an annual rate of 3.8%, while economists were expecting 3.7% after the observed rate of 3.3% in March. It would have been much worse if the US and EU had not tapped into their stocks at a rate not seen since 1973.
“The total inflation is at its highest level since May 2023,” points out Bastien Drut, head of strategy and analysis at CPRAM, explaining that about two-thirds of the inflation increase for the month comes from the “energy” component.
It has been over five years now that inflation has been above the Fed’s target (cumulatively 29%, compared to a 26% increase in wages on average in the US): there will certainly be a majority of voices within the FOMC – chaired by Kevin Warsh – calling for the abandonment of the “accommodative bias” and possibly a rate hike (31% consensus for at least one hike by the end of 2026).
Underlying Inflation (“core”) is at its highest since September:
In underlying data (excluding energy and food products), the annual inflation rate stood at 2.8%, reaching its highest level since last September, up from 2.6% in March, while the consensus was 2.7%.
In sequential terms, the increase in consumer prices was 0.6% in total data and 0.4% in underlying data in April, with the latter figure slightly surprising, according to Josh Jamner of ClearBridge Investments.
“This development brings the inflation acceleration over two months to 1.5%, its highest level since 2022, and a reading that is among the highest observed since the mid-1970s,” notes this analyst.
The rise in housing costs (0.6%) also contributed to this month’s increase, and the so-called “supercore” CPI, corresponding to services excluding housing in the core CPI, increased by 0.45% in April.
But over 1 year, many price increases are striking:
- Energy products (oil, gas): 29.2%
- Gasoline: 28.4%
- Airfare/airline tickets: 20.7% (kerosene 180%)
- Energy (distribution/utilities): 17.9%
- Electricity: 6.1%
- Fruits and vegetables: 6.1%
- Hospital services: 5.5%
- Car repairs: 5.1%
Given the relative weight of these expenses in the budget of American households, a 3.8% score over 1 year seems completely harmless in view of the “perceived inflation” (which is biting hard into real purchasing power).
If the Strait of Hormuz were to reopen by mid-June (under the best-case scenario), the price of oil is unlikely to fall below $90, considering the 5 million barrels of production capacity that have vanished due to the war (not just the one on hold in the Gulf, but also between Russia and Ukraine, and no “pause” there), as the US, Europe, and all Asian countries will attempt to simultaneously replenish their strategic reserves.
Copyright (c) 2026 Zonebourse.com – All rights reserved. [Context: The article discusses the recent rise in inflation in the United States and its impact on various markets including the stock market and commodities. Fact Check: The figures and percentages presented reflect the data mentioned on the state of inflation and price increases.]
