Morning Brief: US April PPI Surges 6% (3-Year High); Warsh Confirmed as Fed Chair

At a Glance

📈 US April PPI +6% YoY (2022 high); inflation pressures intensify.

🏛️ Senate confirms Warsh as Fed Chair (54:45), most partisan vote on record.📊 S&P 500 +0.58%, Nasdaq +1.20% (new highs); semis +2.6%.

🛢️ WTI crude -1.14% to $101.02/bbl; 30Y Treasury yield >5% (2007 first).

1. Market Outlook

Key Event

US April PPI +6% YoY (2022 high), driven by energy. Senate confirms Warsh (54:45, 1 Dem yes) – most partisan Fed Chair vote. Trump arrives in Beijing (9-year presidential hiatus). Middle East tensions rise: Iran accuses Kuwait of “illegal” vessel attacks; Kuwait foils Iranian “armed infiltration.”

Market Reaction

Indices mixed: Nasdaq +1.20%, S&P +0.58% (new highs). Tech gains: NVIDIA +2.3% (near $5.5T mkt cap), Tesla +2.7%. 30Y Treasury yield >5% (2007 first). WTI $101.02/bbl** (-1.14%). Bitcoin <$80,000**.

Exclusive View

Warsh’s first inflation report is red-hot – 6% YoY (3-year high). He inherits a Fed facing reflation risks, not controlled inflation. 30Y yield >5% = historic signal: markets doubt 2% long-term inflation. Gulf-Iran “shadow war” goes public – direct confrontation risks Strait of Hormuz escalation from bilateral to multilateral.

2. Overnight Markets

Hot PPI ignored by tech (new highs); long-end yields keep rising.

US Equities

• Dow: -0.14% to 49,693.20
• Nasdaq: +1.20% to 26,402.34 (new high)
• S&P 500: +0.58% to 7,444.25 (new high)💡 Tech megacaps lead: NVIDIA +2.3%, Tesla +2.7%. Cisco +17% post-earnings; Nebius +15.7%. Small-caps lag – funds concentrated in tech giants.

European Equities

• DAX 30: +0.72% to 24,148.00
• FTSE 100: +0.55% to 10,322.23
• CAC 40: +0.35% to 8,007.97💡 Broad rebound; DAX leads. Markets stabilize after ECB’s Nagel hawkish hike signal.

Fixed Income

• US 10Y: +0.58 bps to 4.4688%
• US 2Y: -1.23 bps to 3.9791%💡 30Y yield >5% (2007 first); long-end up 3 straight days. Curve steepens – long-term inflation fears dominate.

Commodities

• WTI June: -1.14% to $101.02/bbl
• Brent July: -1.99% to $105.63/bbl
• Spot Gold: -0.55% to $4,689.05/oz
• Spot Silver: +1.19%💡 Oil dips despite Middle East tensions. Silver outperforms; risk rotation from crypto to tech.

3. Macro News

📊 US April PPI +6% YoY (3-Year High)Energy-driven; core PPI +5.2% YoY (3+ year high).Insight: PPI leads CPI – 6% print signals persistent consumer inflation. Warsh’s debut press conference: watch for rate hike hints.

🏛️ Senate Confirms Warsh as Fed Chair (54:45)Most partisan vote; 1 Dem yes. Succeeds Powell (term ends Friday; Powell stays as governor).Insight: Warsh inherits reflation risks. Priority: hike odds, not rate cuts.

📋 Fed Survey: Inflation & Jobs Anxiety Surges90% fear price hikes; 42% worry about jobs (vs 37% 2024).Insight: Inflation anxiety predates Iran war – structural issue. Midterms hinge on economy.

🇨🇳 Trump Visits Beijing (9-Year Hiatus)First in-person summit since Oct 2025 Busan.Insight: Timing critical – hot inflation + yield surge. Agenda: trade, tariffs, Iran coordination.

💥 Middle East Shadow War Goes PublicIran: Kuwait attacks vessels. Kuwait: foils Iranian island infiltration. Saudi-led strikes on Iran-backed Iraqi militias.Insight: First Gulf state strikes on Iran proxies – proxy war → direct confrontation. Strait tensions risk multilateral escalation.

4. Corporate News

🔍 Microsoft Pursues AI Startup to Cut OpenAI RelianceIn talks with Inception (Stanford diffusion tech); SpaceX also interested.— Microsoft builds Plan B post non-exclusive OpenAI deal. SpaceX bid signals Musk’s AI ambitions beyond xAI.

📡 Cisco Beats Guidance, Restructures & Cuts JobsQ4 revenue $16.7B–$16.9B (vs $15.8B); EPS $1.16–$1.18. <4,000 layoffs; $1B severance.— Post-earnings +13%: AI infrastructure narrative intact. Layoffs fund AI investment – classic tech cost-cut + AI pivot.

5. Key Events to Watch Today

🇨🇳 Trump’s China Visit: Iran, tariffs, tech controls in focus. Watch for joint statements.

📊 US April Retail Sales: Gauge consumption resilience – soft-landing barometer.

📋 US Initial Jobless Claims: Test labor market cracks amid rising jobs anxiety.

🗣️ Fed Speakers (Williams, Barr, Schmid, Harker): First comments post hot PPI & Warsh confirmation – hike odds in focus.