Gas Prices Up, Markets Struggle, Consumers Buy, Workers Hurting, and Aronimink

May 17, 2026 THE EXPECTED CPI INCREASE: The U.S. Bureau of Labor Statistics released April's consumer price index. The CPI rose 0.6% after increasing 0.9% in March. Energy prices rose sharply once again, up 3.8%. The 12-month CPI number has moved back up to 3.8%. Those are ugly numbers, Energy prices accounted for 40% of the rise. Once the war winds down, it should bring oil prices back in a downward direction, but for now we are all paying higher prices, and the overall impact of these higher prices will ripple across the economy and the markets. The Fed watches the "core" CPI number closely. That index eliminates energy and food prices. That index moved from 2.6% year over year to 2.8%. A rise in housing rents was the main driver of the increase in the core number.

WHOLESALE PRICES INCREASE: Again, it came as no surprise that the Producer Price Index rose dramatically. It rose 1.4% in April, the fastest monthly pace in more than four years. Energy prices surged 7.8%, and gasoline by 15.6%. If you strip out those two categories, prices still rose by 1.0%.

GAS PRICES KEEP RISING: We are going to need to see this trend reverse before the inflation worries ease.

RALLY STALLS: Although the S&P 500 eked out a weekly gain, it was not a good week for investing markets in general. The NASDAQ Composite index was barely negative, but the Russell 2000 (small U.S. companies) fell 2.37% and the EEM index (emerging markets stocks) fell 4.22%. Bond values fell (see below) and are now in negative territory for the year as the new round of inflation has caused that investment to reverse course. Bonds have been struggling for months by the rise in energy prices. Optimism of an Iran deal that will open the Strait of Hormuz is now waning. This past week, foreign government bonds experienced downward pressure as investors sold, especially Japanese and U.K. bonds. Japan announced that it will have to borrow more money to cover the higher energy costs. In the U.K., anxiety of yet another change in Prime Minister worried owners of its bonds. The selloffs affected the U.S. bond markets and down went values.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.

CONSUMERS KEEP SPENDING: Retail sales rose 0.5% in April. Yes, rising gas prices had something to do with it, but gains in spending were broad based with nine out of the thirteen major sales categories rising. Non-store retail continued to be a strong category rising 1.1%, the third month in the last four where such sales have risen more than 1.0%. Sales at restaurants and bars were up 0.6%.

U.S. INDUSTRIAL PRODUCTION REMAINS HEALTHY: In April, U.S. industrial production (manufacturing, utilities, and mining) increased by 0.7%. The gains were broad based with manufacturing rising by 0.6%. Production of high tech equipment (needed for AI) rose 1.0%. Utilities gained 1.9%. After roughly 20 years of stagnation, utilities have been gaining for nearly three years now as data centers and cryptocurrency fuel growing demand for energy.

DEVASTATING STUDY: Modern Health just released a report on the health of full-time U.S. workers. Modern Health surveyed workers at firms with 250 or more staff. What they found was shocking (to me at least). 49% of the survey respondents described themselves as "struggling." 52% use substances to cope with work stress during the working day. 51% of Generation Z employees used cannabis during working hours. 59% turn to cannabis products after work. 50% turn to alcohol. Fear of AI is at the top of the fear list. 69% believe it will cause job losses at their company within three years. 49% fear losing their own job to AI. 24% say AI is damaging their mental health now. 72% of respondents said their employer actively encourages productivity at the expense of personal wellbeing. 40% of senior managers received a new mental health diagnosis in the past 12 months. There is something deeper going on here.

TO THE BEACH WITH OLD FRIENDS: Not everyone gets to experience this, but we have had the privilege of living in the same general location for over three decades, and we have gone to the same church during those same years. Last weekend, Deb and I took a quick trip to Hilton Head to hang out with five other couples with whom we share that experience (although not all are still in the area or still go to that church). Old friends with whom we have decades of shared experiences: priceless. They asked me to take the selfie. Big mistake. I hate selfies.

THE BOYS ARE BACK IN TOWN: The PGA Championship is being held at Aronimink Golf Club in Newtown Square, PA. My three sons and I went on Thursday. The weather was cool and started off a little wet, but it was a great day. I had the privilege of golfing the course last year which made this week's experience that much more interesting. The pros were having a lot of trouble on the greens (they are very tough), but we saw a lot of great golf. Below are a couple of pictures of Scottie Scheffler, Justin Rose and others.

Have a great week!

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Stonecrop Wealth Advisors, LLC

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"There are men and women who make the world better just by being the kind of people they are. They have the gift of kindness or courage or loyalty or integrity. It really matters very little whether they are behind the wheel of a truck or running a business or bringing up a family. They teach the truth by living it." James A. Garfield*

"Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land." Ecclesiastes 11:2 (NIV)

*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the 20th week, and James A. Garfield was our 20th president. SOURCES:

THE EXPECTED CPI INCREASE: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/5/12/the-consumer-price-index-cpi-rose-0.6percent-in-april

WHOLESALE PRICES INCREASE: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/5/13/the-producer-price-index-ppi-rose-1.4percent-in-april

GAS PRICES KEEP RISING: YCharts.com

CONSUMERS KEEP SPENDING: https://www.ftportfolios.com/Commentary/EconomicResearch/2026/5/14/retail-sales-rose-0.5percent-in-april

U.S. INDUSTRIAL PRODUCTION REMAINS HEALTHY: https://www.federalreserve.gov/releases/g17/current/

DEVASTATING STUDY: https://wrdnews.org/workplace-stress-and-substance-use-what-the-numbers-reveal/

RALLY STALLS: https://www.wsj.com/finance/investing/mounting-inflation-pressures-deepen-global-bond-slide-0a87427a?mod=Searchresults&pos=1&page=1

(c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved

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SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.