US CPI Hits 4.2% in May 2026, Highest in 3 Years

The US CPI exceeding expectations at 4.2% has heightened concerns that the Fed may delay or reverse interest rate cuts. The 2.7% decline in the SPX over the past 24 hours confirms already weak market sentiment. With the RSI falling to 42.9, below the neutral zone, and the price remaining below the 20- and 50-day moving averages, short-term pressure may persist. The MACD line being below the signal line and in negative territory also supports bearish momentum. However, as the market has not yet entered oversold territory, the pace of the decline may remain limited.

NDX dropped 4.7% in the last 24 hours to 29,083, with the RSI entering a weak zone at 41. The MACD line is below the signal line and in negative territory, confirming short-term downward momentum. The price is trading just below the 20-day SMA (29,232) and well below the 50-day SMA (29,989). The higher-than-expected CPI data in the news may increase rate hike concerns, putting pressure on technology stocks. A continued short-term downtrend is expected, but caution is advised as the market has not yet entered oversold territory.

The high CPI data could support the DXY in the short term by reinforcing expectations that the Fed will continue raising interest rates. However, the RSI is in weak territory at 43, and the price is below both the 20- and 50-day moving averages, indicating that any upward movement may be limited. The MACD is below the signal line and in negative territory, suggesting that momentum has not yet turned. Therefore, an upward trend is possible but may be fragile.

The high CPI data reinforces expectations that the Fed will continue raising interest rates. This creates a negative environment for non-yielding assets like gold. Technically, while the RSI at 23 indicates oversold conditions, the MACD and moving averages suggest that downward momentum persists. Selling pressure is likely to continue in the short term, though some corrective buying may occur due to oversold conditions.