This content was published on
June 10, 2026 - 15:33
5 minutes
(Bloomberg) — A relatively tame inflation report brought a degree of relief to Wall Street, but failed to lift stocks amid heightened geopolitical tensions that are keeping energy costs elevated and threatening further price pressures.In another tech-led decline, the S&P 500 wiped out this week’s advance. Treasuries barely budged after data showed that while consumer prices accelerated as the Iran war pushed up energy costs, a gauge of underlying inflation rose by less than forecast. Oil rose as President Donald Trump slammed Iran for not reaching a quick peace deal with the US after a night of attacks that have strained a fragile truce.The consumer price index climbed 4.2% from a year earlier, the most since early 2023. The core gauge, which excludes food and energy, increased 0.2% from April and 2.9% from a year earlier. Despite an energy-fueled jump in the overall CPI, the details of the report painted a milder picture, providing a welcome signal to Federal Reserve officials.“Overall, while the pace of headline inflation was driven higher by gasoline and energy prices, the core figures were benign — suggesting that the Fed has plenty of capacity for patience during the next several meetings,” said Ian Lyngen at BMO Capital Markets.With core measures suggesting more limited price increases and much of the upside coming from oil, the CPI release suggests that inflationary pressures stemming from the energy price shock have remained manageable for the US economy so far, according to Josh Jamner at ClearBridge Investments.“Cooler core inflation is an encouraging sign for investors, suggesting less of a need for the Federal Reserve to raise interest rates if inflationary pressures stay more contained than previously expected,” he said.The latest inflation data should give the Fed some “breathing room” to remain patient as the energy supply shock plays out, according to Angelo Kourkafas at Edward Jones. If oil prices don’t make another run higher, inflation will likely peak this quarter and begin easing in the back half of the year, he said.“The near-term Fed policy outlook remains murky, with policymakers expected to remove their easing bias at next week’s meeting,” Kourkafas noted. “Even so, we don’t expect the Fed to react quickly to what appears to be largely energy-driven price pressures.”Now if if the Strait of Hormuz remains disrupted through the Labor Day weekend, we would expect the energy shock to affect additional sectors and heighten uncertainty about the future path of monetary policy, according to Jeffrey Roach at LPL Financial.“It’s very possible that things wrap up in the Middle East and shipping gets back to normal over the course of the rest of the year, in which case we can see inflation come down over time and the Fed could hold off raising rates, but if things stay as they are currently, then all bets are off,” said Chris Zaccarelli at Northlight Asset Management.Corporate Highlights:The rally in artificial intelligence-related stocks is suddenly on shaky footing, and Oracle Corp.’s earnings report after the close represents the group’s next test. Alphabet Inc.’s Google pitched major news outlets, including the Washington Post, NPR and People Inc., on an AI tool that summarizes news articles earlier this year, but the reception was cool. Super Micro Computer Inc. plans to raise $7 billion through a package of equity offerings to purchase the components needed to fulfill customers’ orders for the company’s artificial intelligence servers. Taiwan Semiconductor Manufacturing Co. reported a 30% rise in its monthly sales, reflecting continued strength in demand spurred by a global rush to build AI infrastructure. Shares of several large trucking companies plunged after Amazon.com Inc. announced an expansion of its shipping service that has already shaken the transportation and logistics sector and unsettled investors. Some of the main moves in markets:StocksThe S&P 500 fell 0.6% as of 9:31 a.m. New York time The Nasdaq 100 fell 0.8% The Dow Jones Industrial Average fell 0.6% The Stoxx Europe 600 fell 0.1% The MSCI World Index fell 0.5% CurrenciesThe Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1559 The British pound rose 0.2% to $1.3405 The Japanese yen was little changed at 160.39 per dollar CryptocurrenciesBitcoin fell 0.7% to $61,658.88 Ether fell 1.1% to $1,641.79 BondsThe yield on 10-year Treasuries was little changed at 4.52% Germany’s 10-year yield advanced three basis points to 3.07% Britain’s 10-year yield advanced two basis points to 4.92% CommoditiesWest Texas Intermediate crude rose 1.5% to $89.49 a barrel Spot gold fell 2.7% to $4,146.30 an ounce ©2026 Bloomberg L.P.
