S&P 500 Stumbles as Inflation Outpaces Wage Growth

The S&P 500 (SPX) is trading lower on Tuesday following a disappointing inflation update from the Bureau of Labor Statistics (BLS).

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In April, the Consumer Price Index (CPI) rose 3.8% year-over-year, above expectations of 3.7%. It also outpaced annual wage growth, which came in at 3.6%, for the first time since 2023. In other words, consumers are losing purchasing power as prices rise faster than incomes.

Energy Spike Fuels Inflation

Higher oil and gas prices stemming from the closure of the Strait of Hormuz and the U.S.-Iran war have largely been responsible for rising costs. The energy index climbed 3.8% in April and contributed 40% of the monthly rise in CPI. Since the start of the war on February 28, prices at the pump have surged 51%, or $1.52, to $4.50.

On Monday, President Trump said he supports suspending the federal gasoline tax “for a period of time,” although the measure would require congressional approval. The tax stands at 18.4 cents per gallon.