At 4.2%, US inflation logs biggest gain in 3 years

The consumer price index increased 4.2% in the 12 months through May, boosted by surging prices for energy products amid the West Asia conflict, and giving more ammunition for the Federal Reserve to keep interest rates unchanged into 2027. This was the largest gain since April 2023, the Bureau of Labour Statistics said.

Excluding the volatile food and energy components, the CPI increased 2.9% year-on-year in May after rising 2.8% in April. The rise in inflation was in line with economists' expectations.

Wall Street’s major indexes extended declines on Wednesday, as technology stocks remained under pressure and renewed tensions between the United States and Iran overshadowed a tame inflation reading. The S&P 500 tech index was down 1.6% . Dow Jones fell 599 points or 1.2%, the S&P 500 lost 69 points, or 0.9%, and the Nasdaq Composite lost 324 points, or 1.3%.

Spot gold was down 3.3% at $4,124 per ounce, its lowest level since March 23.