Finance

Fresh economic reports showed May headline inflation reaching 4.2%, its highest level since early 2023, while the Producer Price Index also exceeded analyst expectations with a 1.1% monthly increase. These figures have led market participants to price in a higher probability of Federal Reserve rate hikes by the end of 2026, diverging from earlier expectations of cuts.

Oil prices experienced significant volatility, with West Texas Intermediate crude climbing near $92 per barrel following news of U.S. strikes before retreating as geopolitical tensions momentarily calmed. Surging gasoline costs, which have risen over 40% year-over-year, are currently offsetting wage gains for many American workers and driving core inflation concerns.

While broader indexes recovered, semiconductor and AI-related stocks remained under pressure due to high valuations and profit-taking after massive year-to-date gains. Notable tech giants including Nvidia and Microsoft have recently faced downward price targets as investors rotate into more defensive sectors like health care and real estate.