Stocks Join Bonds Lower, Inflation Accelerates, Iran, More
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Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made.
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News when you want it with Bloomberg News Now. I'm Karen Moscow and stocks are lower at the open with a key inflation report showing the impacts of higher energy and supply disruptions stemming from the war in Iran. Equities are falling from records after the core consumer price index rose more than economists expected in April. A slide in chip makers also hurting stocks. Treasury two-year yields hovering near the highest since March, and U.S. crude oil, it rose above $101 a barrel. Looking at the S&P 500, down 0.4%. So is the Dow Jones Industrial Average. The Nasdaq is down 0.7%. The 10-year Treasury yield, 4.45%. The yield on the two-year, 3.99%. And taking a look at NYMEX crude oil, it's up more than 4% at $102.06 a barrel, Brent at $108.27.
Again, U.S. inflation continued to accelerate in April amid an ongoing climb in gasoline prices driven by the Iran war and a jump in the cost of groceries. The Consumer Price Index rose 3.8% from a year earlier, marking the fastest pace since 2023. From a month earlier, prices were up 0.6%. The core CPI, which excludes food and energy, increased 0.4% from a month earlier and 2.8% from a year ago. Michael Gapin is chief U.S. economist at Morgan Stanley.
Well, there's some hints of second round effects of higher energy prices on core. So those airline numbers, the food at home numbers, there's also kind of spillage into headline through food because a lot of food prices are related to transportation costs. And so the concern here, the assumption here, I think from the Fed's point of view and ours, is that oil prices tend to give you headline effects but not core effects and there's at least at the moment given the magnitude of the rise in energy prices some hints of those second round effects in core we need to see if those persist and that's michael gapen with morgan stanley core cpi was boosted in part by a statistical quirk in the report's measure of rents resulting from the 2025 government shutdown
President Trump says the Iran ceasefire is on massive life support after he rejected Tehran's latest counterproposal to the U.S. peace offer. At the same time, he says he feels no pressure to end a conflict that's led to a global energy supply shock. Bloomberg government's Zach Cohen has more from Washington.
This all comes as Trump faces some pretty serious economic and political headwinds resulting from the war, which remains unpopular with Americans. and has resulted in gas prices rising to, I believe, the latest average across the United States, $4.52 a gallon, which has potentially some significant impacts on the upcoming midterm elections that will determine whether his party will retain control. control of both the House and the Senate.
And that's Bloomberg government Zach Cohen, who reports the president has floated suspending the federal gas tax, but that would require an act of Congress. Defense Secretary Pete Hankseth is facing tough questions from Republican and Democratic lawmakers in Congress about the Trump administration's endgame for the Iran war, the conflict's costs, and its impact on diminishing weapons stockpiles.
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