Weekly Economic Update
Last Week and the Economy
Major stock indices finished with mixed results last week. The S&P 500 managed the only positive return with a modest 0.13% rise. Conversely, the Nasdaq Composite and the Dow Jones Industrial Average notched slight weekly losses of 0.08% and 0.17%, respectively. Deeper drops hit international and small-cap sectors, where the international MSCI-EAFE Index fell by 1.67%, while the small-cap Russell 2000 declined by 2.37%.
Consumer Prices Accelerate in April as Energy and Shelter Costs Climb
The U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.6% in April on a seasonally adjusted basis. This monthly advance pushed the 12-month headline inflation rate up to 3.8% before seasonal adjustment, marking a notable acceleration from the 3.3% annual pace that the agency reported for March.
Energy costs acted as a major contributor to the monthly bump, jumping 3.8% in April alone and accounting for more than 40% of the total all-items increase. Within that category, monthly gasoline prices rose by 5.4%, while shelter costs grew by 0.6% over the month. Meanwhile, food prices at home grew by 0.7% in April, pushing the annual food-at-home inflation rate to 2.9%.
Core inflation, which excludes volatile food and energy components to help track long-term price trends, also experienced upward pressure. The core index rose 0.4% over the month, causing the year-over-year core inflation rate to climb to 2.8% from March’s reading of 2.6%. Conversely, some subcategories registered small monthly declines, including new vehicles and medical care.
Senate Confirms Kevin Warsh as 17th Federal Reserve Chair
In a 54–45 vote, lawmakers approved Kevin Warsh to succeed outgoing Chairman Jerome Powell, whose term as chair concluded on May 15. Warsh assumes control of the central bank during a challenging economic climate, with headline consumer price inflation recently accelerating to a three-year high of 3.8%.
To accommodate the incoming chairman’s arrival, Federal Reserve Board Governor Stephen Miran submitted his resignation on Thursday. Miran stepped down to vacate the space for Warsh to take his seat on the governing body.
Warsh previously served as a Federal Reserve governor from 2006 to 2011 and has publicly criticized the central bank’s post-pandemic inflation response. Analysts expect his administration to focus heavily on tighter price discipline, streamlined public communications, and a potential shift toward alternative inflation metrics – such as trimmed averages – to guide future adjustments to the benchmark federal funds rate. Warsh will lead his first official Federal Open Market Committee policy meeting on June 16–17, 2026.
In an unusual transition arrangement, Powell plans to remain on the Board of Governors to serve out the remainder of his fourteen-year term as a regular governor. This marks the first time in almost 80 years that an outgoing chair has remained on the board.
President Trump and Chinese Leader Xi Jinping Conclude Beijing Summit
U.S. President Donald Trump and Chinese President Xi Jinping concluded their diplomatic summit in Beijing on Friday. The high-profile state visit lasted three days and marked the first time a sitting U.S. president traveled to China since late 2017.
On Thursday and Friday, the two leaders held extensive talks at the Great Hall of the People and the Zhongnanhai leadership compound. Geopolitical security, global trade frameworks, supply chains, and artificial intelligence risks topped the diplomatic agenda during the meetings.
President Trump requested Chinese diplomatic assistance in securing an agreement with Iran to end the current military conflict and permanently reopen the Strait of Hormuz. President Xi reiterated China’s existing framework for regional peace, which calls for an immediate cessation of hostilities. He also emphasized that the legal status of Taiwan remains the most critical red line in U.S.-China relations. Following the discussions, Trump stated that he had not yet finalized a decision regarding a pending multibillion-dollar arms sale to Taiwan.
The summit ended without any immediate major structural trade breakthroughs, though both nations agreed to establish a joint “Board of Trade.” This newly formed administrative group – composed of senior officials from both nations – will formally oversee Chinese implementation of purchase agreements for American agricultural products and commercial airplanes. Both leaders also confirmed tentative plans for a reciprocal state visit by President Xi to the United States later this fall.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Key Economic Data Points
| Data Point | Date | Current | Change from Prior Period | Next Report |
| Unemployment Rate | 04-2026 | 4.3% | 0 | June 5th |
| FOMC Target Rate | 04-2026 | 3.50% – 3.75% | 0 | June 17th |
| GDP | Q1 2026(adv) | 2.0% | +1.5 | May 28th |
| PCE Inflation | 03-2026 | 3.5% | +0.7 | May 28th |
Data Sources: U.S. Bureau of Labor Statistics, Federal Reserve, U.S. Bureau of Economic Analysis, U.S. Bureau of Economic Analysis
Weekly Quote:
“It's how you deal with failure that determines how you achieve success.”
-David Feherty, Former Professional Golfer
The Week Ahead – Economic Data & Events
Monday: Business Leaders Survey, SCE Household Spending Survey
Tuesday: New Residential Construction, NAR Pending Home Sales Index
Wednesday: Outlook-at-Risk
Thursday: Philadelphia Fed Manufacturing Survey, Reserve Demand Elasticity
Friday: Michigan Consumer Survey
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Monday, May 18, 2026: No S&P 500 companies confirmed for this date.
Tuesday, May 19, 2026: Home Depot(HD): PMO, Eagle Materials (EXP): PMO, Keysight Technologies (KEYS): AMC
Wednesday, May 20, 2026: TJX Companies (TJX): PMO, Target (TGT): PMO, Lowe’s (LOW): PMO, NVIDIA Corporation (NVDA): AMC, Analog Devices (ADI): PMO, V.F. Corporation (VFC): PMO, Inuit (INTU): AMC, Nordson (NDSN): AMC
Thursday, May 21, 2026: Ross Stores (ROST): AMC, Ralph Lauren (RL): PMO, Walmart (WMT): PMO, Deere & Company (DE): PMO, Deckers Outdoor (DECK): AMC
Friday, May 22, 2026: Booz Allen Hamilton (BAH): PMO
AMC = After Market Close, PMO = Prior to Market Open
Source: Yahoo Finance
Weekly Tip:
Stay alert. Be aware that cybercriminals can easily fake incoming phone numbers on caller ID to make it appear that they are calling from a trusted institution, such as your bank.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Last Week's Riddle and Answer
Last Week's Riddle:
I have a deck but no cards, a bow but no arrows, and a yard but no grass. What am I?
Last Week's Answer:
The answer is a ship. Ships have decks, bows, and yards, but no cards, arrows, or grass.
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