Stocks Expected to Gain after May's Soft Inflation Data; Gold, Silver Cooling; WTI Crude at Two-Month High

Stock futures turned higher after the BLS released May CPI, showing inflation largely tamed and close to the Fed's goal of two percent per year.

From the BLS release:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent on a seasonally adjusted basis in May, after rising 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.4 percent before seasonal adjustment.

The index for shelter rose 0.3 percent in May and was the primary factor in the all items monthly increase. The food index increased 0.3 percent as both of its major components, the index for food at home and the index for food away from home also rose 0.3 percent in May. In contrast, the energy index declined 1.0 percent in May as the gasoline index fell over the month.

The index for all items less food and energy rose 0.1 percent in May, following a 0.2-percent increase in April. Indexes that increased over the month include medical care, motor vehicle insurance, household furnishings and operations, personal care, and education. The indexes for airline fares, used cars and trucks, new vehicles, and apparel were among the major indexes that decreased in May.

The all items index rose 2.4 percent for the 12 months ending May, after rising 2.3 percent over the 12 months ending April. The all items less food and energy index rose 2.8 percent over the last 12 months. The energy index decreased 3.5 percent for the 12 months ending May. The food index increased 2.9 percent over the last year.

Despite the positive tone, the core index (excluding food and energy) rose 0.1 percent in May, but is still high at 2.8 percent annually. Tariffs could push discretionary items even higher price-wise.

On Tuesday, U.S. and Chinese delegations concluded trade talks in London, agreeing on the framework set out in Geneva last month. The news, while unsubstantial, is being taken as positive towards an understanding on tariffs that would include rare earths from China, chip technology from the U.S., while allowing Chinese students to continue their education at American universities.

The two sides will continue to work towards general trade policy with tariffs of 55% on most goods entering the U.S. from China.

For whatever reason, and despite OPRC raising production quotas for crude oil, WTI crude is up again Wednesday morning, hitting a high of $66.42/barrel after the inflation data release. The price is the highest for WTI since April 3rd.

Gold and silver were relatively flat going earlier in the morning, but also jumped on the CPI news. Gold is trading around $3360 at 9:00 am ET. Silver has cooled off after big gains the past few days hovering between $36.50 and $36.50 per ounce.

Stock futures are generally positive, Dow and NASDAQ futures are both up 51 points. S&P futures are ahead by 13, though all three are dropping from earlier highs.

Stocks continue to approach all-time highs, but so too, gold and silver. Bonds have been settled down, with the 10-year at 4.42% and 30-year bonds yielding 4.94%.

The general tone is full speed ahead on the economy and stocks, riots and National Guardsmen in Los Angeles of little interest.

At the Close, Tuesday, June 10, 2025:
Dow: 42,866.87, +105.11 (+0.25%)
NASDAQ: 19,714.99, +123.75 (+0.63%)
S&P 500: 6,038.81, +32.93 (+0.55%)
NYSE Composite: 20,114.81, +80.35 (0.40%)