WASHINGTON, May 13, 2026, 09:01 (EDT)
Producer prices in the U.S. surged 1.4% in April, blowing past expectations and marking the sharpest monthly increase since March 2022. The report pushed stocks lower, adding to skepticism that the Federal Reserve will be able to cut rates anytime soon. According to the Bureau of Labor Statistics, the Producer Price Index climbed 6.0% year-over-year.
Markets got hit with the inflation surprise at a tough moment. Wholesale prices jumped just a day after consumer inflation figures came in hot—CPI climbed 0.6% in April, up 3.8% year-on-year, pushed higher by energy costs.
That’s become a flashpoint, with traders zeroing in on Wednesday’s oil inventory data to gauge whether fuel prices might keep pushing up costs for transport, retail, and manufacturing. After the PPI numbers landed, S&P 500 futures slipped into the red; Dow e-minis dropped 270 points as of 8:32 a.m., while Nasdaq 100 futures stayed positive, according to Reuters.
The BLS numbers pointed to broader pressure beyond just fuel. Services at final demand moved up 1.2%. Goods came in even hotter, rising 2.0%, and energy surged 7.8%. Gasoline? Up a sharp 15.6%. Stripping out food, energy and trade, core PPI climbed 0.6% for the month, underscoring persistent underlying pressure.
Wednesday brought a scheduled round of data risk, with Investing.com flagging PPI, core PPI and U.S. crude inventory numbers as key events. Forecasts saw crude stocks dropping by 1.6 million barrels, following a 2.313 million-barrel draw the previous week. The Energy Information Administration posts its weekly petroleum report shortly after 10:30 a.m. Eastern.
Industry figures showed another drop in crude. The American Petroleum Institute estimated U.S. crude inventories shrank by 2.2 million barrels for the week ending May 8, according to market sources cited by Reuters. Gasoline supplies climbed 502,000 barrels, while distillate stocks slid 319,000 barrels.
Oil’s the main wild card here. According to the EIA’s May outlook, disruptions in the Middle East have grown sharply since April. Now, global oil inventories could shrink by as much as 8.5 million barrels per day this quarter. That’s keeping Brent crude prices hovering near $106 a barrel for both May and June.
The International Energy Agency is sounding the alarm as well: global oil demand could shrink by 420,000 barrels per day this year, the agency said, with supply disruptions since February totaling 12.8 million barrels per day. Stockpiles dropped by 129 million barrels in March, followed by another 117 million barrel draw in April.
Labor data are offering some pushback for now. Private employers tacked on 109,000 jobs in April, according to ADP last week, and annual pay climbed 4.4%—enough for households to keep spending as prices move up. “Small and large employers are hiring, but we’re seeing softness in the middle,” ADP Chief Economist Nela Richardson said. ADP Media Center
The mix matters to retailers. Kavout sees the upcoming ADP report as a key gauge for consumer spending and the SPDR S&P Retail ETF, or XRT. Softer hiring or wage growth can drag on sales, leaving retailers stuck with excess inventory and pushing them toward markdowns. Not everyone feels that squeeze equally; bigger operators like Walmart have more room to maneuver on freight and fuel costs than their smaller, discretionary-focused rivals.
That kind of inflation spillover wasn’t a shock to investors. “Core beat expectations and is moving in the wrong direction, which weakens the case for Fed rate cuts in the near-term,” said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research, following Tuesday’s CPI data. Schwab Brokerage
Wednesday’s crude report is a double-edged sword. If the draw comes in bigger than forecasts, it reinforces the view that energy supplies are still getting squeezed—more strain for margins, consumers, and the Fed. On the other hand, an unexpected build or even a hint of steadier flows won’t undo the PPI jolt, though it might at least take one headache off the table for markets ahead of the next inflation and retail sales numbers.
