Stocks Mixed As Inflation Rises Faster Than Expected

Inflation Rate Was 5% In May

The U.S. has just released the much-awaited inflation data for May. Inflation Rate increased by 5% year-over-year compared to analyst consensus of 4.7%. On a month-over-month basis, Inflation Rate increased by 0.6% compared to analyst consensus which called for growth of 0.4%. Meanwhile, Core Inflation Rate grew by 3.8% year-over-year compared to analyst consensus of 3.4%.

Inflation continues to rise faster than analysts expected. The yield of 10-year Treasuries has recently moved below 1.50% as traders shrugged off inflation worries, but it is currently trying to settle back above this level. If Treasury yields gain upside momentum, yield-sensitive tech stocks may find themselves under pressure.

S&P 500 futures are swinging between gains and losses in premarket trading after the release of inflation reports which is good news for the bulls as the inflation report could have put more pressure on stocks.

Initial Jobless Claims Declined To 376,000

The U.S. has also released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 376,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 370,000.

Continuing Jobless Claims decreased from 3.76 million to 3.5 million compared to analyst consensus of 3.6 million.

The reports indicated that the situation in the job market continued to improve although the pace of such improvements remained slow.

Precious Metals Little Changed After Inflation Data

Interestingly, the U.S. dollar failed to gain material upside momentum after the release of inflation data. Gold and silver made an attempt to gain downside momentum but quickly moved back to previous levels.

While precious metals managed to show some strength after the release of inflation data, the upcoming trading session will be nervous for gold mining stocks and silver mining stocks.

Treasury yields may gain upside momentum as they have recently moved to multi-week lows on speculation that inflation remained under control. If Treasury yields move higher, gold and silver will likely face some pressure.

For a look at all of today’s economic events, check out our economic calendar.