The Markets (as of market close June 12, 2026)
Wall Street navigated another volatile week as stock traders balanced concerns over inflation, geopolitical tensions, and the outlook for interest rates. Markets opened the week under pressure amid escalating concerns surrounding the U.S.-Iran conflict and fears that inflation would remain stubbornly high. However, sentiment improved considerably as the week progressed, fueled by easing tensions in the Middle East and strong stock trader demand surrounding the largest initial public offering in U.S. financial history.
By Friday’s close, all major indexes posted gains, with small-cap stocks leading the advance. The Russell 2000 surged nearly 4% for the week, while the Dow, S&P 500, and NASDAQ each moved higher. Treasury yields edged lower, oil prices declined sharply, and gold fell for a second consecutive week as investor risk appetite improved.
Last Week’s Economic News
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Inflation accelerated in May. The Consumer Price Index increased during the month. Energy prices were the primary driver, accounting for more than 60% of the monthly increase. Gasoline prices also rose in May. Core inflation, which excludes food and energy, increased slightly year-over-year.
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Producer prices continued to climb. The Producer Price Index rose in May, similar to the increase in April. Rising energy costs, particularly gasoline, were responsible for most of the increase.
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The trade deficit narrowed slightly. April’s international trade deficit decreased to $55.9 billion as exports grew faster than imports. Year-to-date, the trade deficit is nearly 50% lower than during the same period in 2025, reflecting stronger export activity and reduced imports.
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Housing remained resilient. Existing home sales rose in May and were also 3.2% higher than a year ago. Home prices continued to rise modestly, with the median existing-home price reaching $429,300. Inventory levels remained relatively stable.
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Federal finances improved modestly. The federal government posted a $293 billion deficit in May following April’s surplus. Despite the monthly deficit, the cumulative fiscal-year deficit remains slightly below last year’s pace.
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Labor market conditions remained stable. Weekly unemployment claims increased modestly. Overall, labor market data continues to suggest a relatively healthy employment environment.
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Gasoline prices eased. The national average price for regular gasoline fell from last week. Despite the recent decline, prices remain higher per gallon than levels this time last year.
Eye on the Week Ahead
The Federal Open Market Committee meets this week, and stock speculators will be watching closely for any changes in policy language or economic projections. Given inflation remains well above the Federal Reserve’s 2.0% target and labor market conditions remain firm, policymakers are widely expected to leave interest rates unchanged. Markets will focus on the Fed’s commentary regarding inflation, future rate expectations, and the broader economic outlook for the remainder of 2026.
Have a nice week!
Sincerely,
Robert G. Carpenter