[New York Stock Exchange] CPI Hits 3-Year High... Mixed Close Amid Inflation Concerns

Core CPI for April Exceeds Expectations
Energy Index Accounts for Over 40% of CPI Gains
Inflation Concerns Resurface
International Oil Prices End Higher

As the U.S. Consumer Price Index (CPI) for April recorded its highest level in three years, sparking concerns over inflation, the three major U.S. stock indexes closed mixed on May 12 (local time).

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow) closed at 49,760.56, up 56.09 points (0.11%) from the previous trading day. The S&P 500 index, which focuses on large-cap stocks, fell by 11.88 points (0.16%) to 7,400.96, while the tech-heavy Nasdaq index dropped by 185.922 points (0.71%) to 26,088.203.

New York Stock Exchange. New York, USA - Photo by Yoonju Hwang, Correspondent

The focus of the market on this day was the CPI figure. The U.S. Department of Labor announced that the April CPI rose 3.8% year-on-year. On a month-on-month basis, it increased by 0.6%. While these figures matched expert forecasts, they still marked the highest level in three years since May 2023.

The core CPI, which excludes the volatile food and energy sectors, rose 2.8% year-on-year and 0.4% month-on-month, surpassing market expectations of 2.7% and 0.3%, respectively. This is interpreted as indicating that the underlying inflation trend is more robust than anticipated.

Looking at the details, energy prices drove the index. The energy index rose 3.8% from the previous month, accounting for more than 40% of the overall CPI increase. In particular, gasoline prices climbed 5.4% from the previous month, and surged 11.1% before seasonal adjustment. Compared to the previous year, the increase reached 28.4%. This is believed to be due to the longer-than-expected Iran war, which has led to higher international oil prices being reflected in consumer prices.

Thomas Martin, Chief Portfolio Manager at Globalt Investments, said in an interview with CNBC, "It's not as if prices are suddenly surging like an avalanche, but they are rising steadily," adding, "The longer the Iran war drags on, the more inflation will continue to intensify."

He went on to say, "As gasoline prices and other costs rise, more and more people will struggle, and ultimately, consumers will continue to face difficult times."

The biggest decliners on the S&P 500 and Nasdaq included semiconductor stocks such as Broadcom, Intel, and Micron. The Philadelphia Semiconductor Index, which had gained more than 60% since the beginning of the year, also fell as much as 6.8% during the session—its largest drop in a year—but recovered part of the losses to close down just over 3%.

Barry Knapp, Managing Partner at Ironsides Macroeconomics, stated, "People became uneasy due to the rapid surge, and reducing exposure after such a sharp rise is prudent risk management," adding, "There doesn't appear to be any fundamental factor that would slow the upward trend in earnings."

Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna International Group, commented, "The historic rally among semiconductor manufacturers could not last forever," adding, "This sell-off was an expected consequence after a massive run-up, but since 'FOMO' (fear of missing out) sentiment is still prevalent in many areas, it is likely to be short-lived."

Meanwhile, international oil prices finished higher. On the New York Mercantile Exchange, June delivery West Texas Intermediate (WTI) crude rose 4.2% from the previous session to $102.18 per barrel. On the ICE Futures Exchange, July delivery Brent crude climbed 3.4% to $107.77 per barrel.

The yield on the 10-year U.S. Treasury note rose 5.0 basis points (1bp=0.01 percentage point) from the previous session to 4.463%. The yield on the 30-year Treasury rose by 3.8 basis points to 5.025%.

This content was produced with the assistance of AI translation services.