The Federal Reserve's April Inflation Forecast Has Been Updated, and It's a Good News-Bad News Scenario for Wall Street

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Sean Williams, The Motley Fool

Mon, April 27, 2026 astatine 4:26 AM CDT 4 min read

Last week was different history-maker for Wall Street, with the benchmark S&P 500 (SNPINDEX: ^GSPC) and iconic Nasdaq Composite (NASDAQINDEX: ^IXIC) launching to record-closing highs. Although the Dow Jones Industrial Average (DJINDICES: ^DJI) didn't scope a grounds high, it's a stone's propulsion distant from one.

Based connected the show of these indexes, you'd presume the U.S. system and Wall Street are firing connected each cylinders. But according to the latest inflation update from the Federal Reserve, things whitethorn not beryllium arsenic rosy arsenic the Dow, S&P 500, and Nasdaq Composite imply.

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Jerome Powell delivering remarks to reporters pursuing a Federal Open Market Committee meeting.

Roughly 2 months ago, connected Feb. 28, President Donald Trump gave the bid for U.S. subject forces, on with Israel, to commence attacks against Iran. These actions spurred Iran to adjacent the Strait of Hormuz to virtually each commercialized vessels, throwing 20 cardinal barrels of regular liquid petroleum shipments (roughly 20% of planetary demand) into limbo.

The instrumentality of proviso and request is straightforward: erstwhile request for a bully outstrips its supply, the terms of that bully rises until request tapers off. The largest-ever planetary vigor proviso disruption sent crude lipid prices soaring.

The contiguous interaction of this lipid terms daze was felt astatine the substance pump. The nationalist mean terms of a gallon of state roseate astatine its fastest gait successful much than 30 years, portion a gallon of diesel changeable up by good implicit 40%, according to information from AAA.

But higher prices astatine the pump are conscionable 1 portion of the story. A important uptick successful vigor prices threatens to meaningfully summation proscription and accumulation costs for businesses, which could beryllium devastating to a historically costly banal market.

A calculator acceptable adjacent to respective paper clippings informing of higher prices and inflation.

In February, earlier the effects of the Iran warfare began showing up successful trailing-12-month (TTM) U.S. ostentation data, TTM ostentation clocked successful astatine 2.4%. One period later, successful March, TTM ostentation changeable up 90 ground points to 3.3%. Although the stickiness of Trump's tariffs successful the goods assemblage isn't helping, this leap was chiefly tied to skyrocketing vigor prices.

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