From the Desk - Economic Commentary
Brandon Casey, Member Strategies - 5/12/2026
U.S. equity markets traded lower Tuesday morning as investors assessed the latest inflation data. Oil prices moved higher amid renewed focus on developments in the war with Iran. President Trump said the ceasefire was “on massive life support” after the U.S. rejected Iran’s counterproposal, calling it unacceptable, while Iranian officials responded that the country would not bow to its enemy. The pullback follows a strong prior session, with both the S&P 500 and Nasdaq closing at record highs on Monday.
Inflation accelerated in April, with CPI rising 0.6% month-over-month and 3.8% over the last year, both in line with expectations, marking the fastest annual pace since May 2023. The annual reading was 3.3% last month. Energy prices drove much of the increase, while food prices also increased. Core CPI rose 0.4% for the month and 2.8% from a year earlier, the highest annual level since January 2025 and up from 2.6% the previous month.
Small business sentiment weakened in April 2025, with the NFIB Small Business Optimism Index falling 1.6 points to 95.8, marking the second consecutive month below its long term average of 98. Of the index’s ten components, six declined, three improved, and one was unchanged, with expectations for business conditions and unfilled job openings contributing most to the decline. Inflation remained a key concern for owners, while price raising behavior moderated.
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