Overview
- The U.S. Bureau of Labor Statistics reported May consumer inflation rose 4.2% year‑over‑year, the highest in three years, with energy costs the main driver of the gain.
- Hours after Wednesday’s CPI release, U.S. forces launched new strikes on Iranian targets and Iranian authorities said the Strait of Hormuz was closed in response, escalating supply fears.
- Brent and WTI crude moved into the low‑to‑mid $90s a barrel and U.S. pump prices climbed above $4 a gallon, increasing costs for households and cutting real wages.
- Equity markets sold off, led by technology and semiconductor losses, as investors rotated into energy and defensive sectors and focused on major corporate events such as the imminent SpaceX IPO.
- Traders pushed up the odds of rate increases later in the year under new Fed leadership because hotter inflation and tighter oil markets raise the risk of persistent price pressure.