The US PCE price increased 0.4% month-over-month in April 2026, less than market expectations of 0.5%, following a 0.7% jump in March, which was the sharpest gain since June 2022. Goods prices increased 0.7% (vs 1.4% in March), while services inflation was steady at 0.3%. The core PCE index, which excludes food and energy, increased 0.2% after a 0.3% gain in March. On an annual basis, headline PCE inflation accelerated for a second straight month to 3.8% from 3.5% in March, reaching its highest level since May 2023 and aligning with headline CPI inflation. Core PCE inflation edged higher to 3.3% from 3.2%, marking its highest reading since late 2023.

The US economy expanded an annualized 1.6% in Q1 2026, up from 0.5% in Q4 but below 2% in the advance estimate, primarily reflecting downward revisions to investment and consumer spending. Consumer spending rose 1.4%, less than 1.6% in the advance estimate. The rise was mainly supported by demand for services (1.8%) while goods remained subdued (0.4%). Also, gross private domestic investment rose 7%, below the 8.7% reported in the advance estimate. Business investment in equipment surged 17.2%, while spending on intellectual property products increased 11.6%. In contrast, investment in structures fell 5.4%, and residential investment declined 6.2%. Meanwhile, net trade contributed negatively to GDP (-1.25 pp), as exports rose by 13.1% (vs 12.9% in the first estimate) while imports jumped 21.1% (vs 21.4%). Government spending rose 4.4%, in line with the initial estimate, recovering from a 5.6% contraction in Q4, as activity resumed following the end of the government shutdown.

US stocks wavered following reports that the US and Iran reached a deal to halt their conflict. The S&P 500 and the Nasdaq 100 swung 0.5% higher to new records while the Dow hovered close to the flatline. Washington and Tehran reportedly agreed to a 60-day memorandum to extend the ceasefire and gradually restore energy exports from the Persian Gulf. Bond yields eased as energy prices pared their rebound, despite data that favors a hawkish Federal Reserve. Jobless claims and consumer spending remained robust, while PCE inflation rose to a three-year high. AI software and infrastructure patrons were sharply higher, with Microsoft, Oracle, and Palantir gaining between 3% and 4%. On the other hand, financial stocks extended to slower momentum with Visa and Blackrock dropping close to 2%. Snowflake surged 30% on a strong outlook, although the result did not spread to other software companies. Salesforce fell 2% after its earnings report.

US natural gas futures climbed more than 4% to above $3.2 per MMBtu, nearing levels last seen in February, after government data showed a smaller-than-expected storage build last week. The EIA reported that utilities added 92 billion cubic feet of gas to storage in the week ended May 22, below forecasts for a 95 to 96 bcf increase and lower than the 104 bcf injection recorded a year earlier. Total inventories rose to 2.483 trillion cubic feet, around 0.9% above year-ago levels and 6.2% higher than the five-year seasonal average, with the surplus over the average narrowing to 144 bcf from 149 bcf the previous week. US gas production in the Lower 48 states eased to 109.4 bcfd in May from 109.8 bcfd in April, while flows to major LNG export plants also declined due to seasonal maintenance work. Weather forecasts point to mostly normal conditions through mid-June.

WTI crude oil futures fluctuated between gains and losses around $89 per barrel on Wednesday following reports that the US and Iran reached a preliminary agreement to extend their ceasefire and begin negotiations on Iran’s nuclear program. According to Axios, the proposed 60 day memorandum of understanding would guarantee unrestricted shipping through the Strait of Hormuz, though the deal still requires approval from President Donald Trump. The report also said Iran would remove all mines from the strait within 30 days. Earlier in the session, oil prices rose about 2% after the US said it destroyed several attack drones near Hormuz, while Kuwait reported intercepting a missile fired toward the country. Iran’s Revolutionary Guard also said several ships attempted unauthorized entry into the Persian Gulf, warning it would respond strongly to any disruption in the waterway.

The South African Reserve Bank raised its key repo rate by 25 bps to 7% on May 28, 2026, as widely expected, marking its first rate hike since 2023. Four of the six members of the MPC backed the decision, while two voted to hold. The committee said inflation risks had increased due to the Middle East crisis and warned that overlapping shocks could trigger second-round effects, justifying a monetary policy response to contain risks and bring inflation back to target. South Africa’s inflation rate climbed to 4% in April from 3.1% in March, now sitting at the upper end of the central bank’s target range. Overall, Inflation forecasts were raised to 4.4% for 2026 (from 3.7%) and to 3.7% for 2027 (from 3.3%). Regarding economic activity, the central bank lowered its growth forecasts for 2026 to 1.2% (vs 1.4%) and for 2027 to 1.7% (vs 1.9%). The policy statement was again accompanied by three alternative scenarios, all pointing to some additional monetary policy tightening.