The Profit Margin: May 18, 2026
Statistic of the Week
It remains challenging for many recent college graduates to land their first full-time jobs. Beyond a soft labor market, many graduates are also adjusting expectations around compensation. Surveys show graduating seniors believe they should earn roughly $80,000 within a year of graduation, while the average starting salary for new college graduates is approximately $56,000 – a gap of nearly $24,000.
Global Perspective
Global trade routes have been disrupted by the conflict with Iran, and the Panama Canal has been one of the beneficiaries. The authority overseeing the canal stated that revenues have increased approximately 10%–15% since the onset of the conflict, driven in large part by higher volumes of oil and fuel shipments from the U.S. to Asia, including China, South Korea, and Japan.
Market Moving Events
Tuesday: Pending Home Sales
Wednesday: FOMC Meeting Minutes
Thursday: Jobless Claims, Housing Starts, Building Permits
Friday: Consumer Sentiment, Leading Indicators
Commentary
Both the S&P 500 and Nasdaq reached all-time highs on Thursday before reversing sharply on Friday as oil prices and bond yields moved higher.1 While Friday was a difficult session for equity investors, weekly performance was relatively muted overall. All three major indices finished slightly lower on the week. The Nasdaq, snapping a six-week winning streak, declined 0.08%, while the S&P 500 and DJIA fell 0.13% and 0.17%, respectively.2
Volatility in the bond market and fresh inflation data were the dominant themes last week. The 10-year Treasury yield jumped 0.24% to close Friday at 4.60%, reaching its highest level in over a year.3 The move higher in yields was driven largely by hotter-than-expected inflation reports and concerns about the duration of the conflict with Iran and its impact on energy prices. The CPI (chart right) showed headline inflation running at its highest level since May 2023.4 If inflation over the past three months were annualized, the rate would equate to approximately 7.1%.5 Headline CPI, now at 3.8%, began the year at 2.4%.6 Energy prices remain a major contributor, with gasoline prices rising another 5% in April after surging 21% in March.7 Producer prices, often viewed as a leading indicator for consumer inflation, climbed to an annualized rate near 6%.8 These inflation readings will make it more difficult for the Federal Reserve to pursue lower interest rates and looser monetary policy. Kevin Warsh, now confirmed as Fed Chair, assumes leadership of the central bank during an increasingly uncertain economic environment. This week’s trading action will likely be dominated by the release of the FOMC meeting minutes and Nvidia’s earnings report.
Chart of the Week
Inflation, as measured by the Consumer Price Index and spurred by the war with Iran, jumped in April. Headline inflation rose at an annualized rate of 3.8% and core increased by 2.8%. This was the highest headline reading since May 2023.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week: Clearnomics,
Bureau of Labor Statistics
Statistic of the Week:
CNBC.com
Global Perspective:
The Economist
Commentary:
1. Bloomberg, Investor’s Business Daily
2. Bloomberg
3. MarketWatch.com, Barron’s
4. MarketWatch.com
5. MarketWatch.com
6. Bureau of Labor Statistics
7. MarketWatch.com
8. Bureau of Labor Statistics