Week In Perspective | Inflation Bites, But Wall Street Bites Back [18-May-26]

Updated: 18-May-2026

The Week on Wall Street

Stocks were mixed last week as investors fretted over hot inflation reports, which offset the move in chipmaker stocks.

The Standard & Poor's 500 Index rose 0.13 percent, while the Nasdaq Composite Index edged down 0.08 percent. The Dow Jones Industrial Average lost 0.17 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.77 percent.^1,2

Volatile Week

Stocks ticked up to start the week, helping the S&P 500 close above 7400 for the first time. The Nasdaq also closed at a new high as chipmaker stocks continued to lead the tech sector.³

Markets opened lower on Tuesday after the Consumer Price Index (CPI) report came in hotter than expected. Stocks pared the losses by the close, with the Dow Industrials managing to notch a slight gain.⁴

The rally continued, with the S&P and Nasdaq hitting new intraday and closing records over the next two trading days. On Thursday, a strong Q1 report from a megacap tech company helped pace gains while investors kept one eye on the ongoing U.S.-China meetings. The S&P 500 closed over 7,500 for the first time, while the Dow reclaimed the 50,000 level.^5,6

Stocks were under pressure from the opening bell on Friday. Treasury yields rose as the three-day summit between U.S. and Chinese leaders came to a close. Investors seemed disappointed that there were no major agreements in the Middle East conflict.⁷

Inflation in Focus

Both retail and wholesale inflation rose faster than expected in April, heavily influenced by higher energy prices.

The CPI increased 3.8 percent year over year in April, up from 3.3 percent in March. Fuel oil alone climbed 54 percent year over year, while gasoline jumped 28 percent. In fact, over 40 percent of the 0.6 percent month-over-month gain was driven by energy inflation.⁸

Inflation also showed up in wholesale prices. The Producer Price Index rose 6 percent over the prior 12 months in April, also a 3-year high. Month over month, PPI rose 1.4 percent (a 4-year high) versus the 0.5 percent increase expected.⁹

This Week: Key Economic Data

Tuesday: Pending Home Sales. Philadelphia Fed President Anna Paulson speaks.

Wednesday: Minutes from Fed's May FOMC Meeting.

Thursday: Weekly Jobless Claims. Housing Starts. Building Permits. Purchasing Managers Index—Services. Purchasing Managers Index—Manufacturing.

Friday: Consumer Sentiment. Leading Economic Indicators.

Source: Investors Business Daily - Econoday economic calendar: May 15, 2026. The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision.

This Week: Companies Reporting Earnings

Tuesday: The Home Depot, Inc. (HD)

Wednesday: NVIDIA Corporation (NVDA), Analog Devices, Inc. (ADI), The TJX Companies, Inc. (TJX), Lowe's Companies, Inc. (LOW), Intuit Inc. (INTU)

Thursday: Walmart Inc. (WMT), Deere & Company (DE)

Source: Zacks, May 15, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.