CNBC — 2026-05-12#

Lead Story#

U.S. consumer prices reaccelerated to a 3.8% annual pace in April, fueled by Iran war-driven energy spikes and persistent housing costs, pushing traders to price in a 37% probability of a Federal Reserve rate hike by year-end.

Markets & Economics#

The April Consumer Price Index rose 0.6% month-over-month, lifting the annual inflation rate to 3.8% as energy, shelter, and food costs surged. Following the hot print, fed funds futures markets are now pricing in a roughly 37% chance that the Federal Reserve’s next move will be a rate hike before the end of the year. In Washington, the Senate confirms Kevin Warsh as Fed Governor vote cleared the chamber, paving the way for his expected confirmation as Chair later this week. Meanwhile, oil markets remain on edge as President Trump declared the U.S.-Iran ceasefire on “life support,” sending West Texas Intermediate crude back above $100 per barrel.

Business & Earnings#

Swiss sneaker brand On Holding reported a strong first-quarter beat with a 14.5% jump in sales, prompting the company to raise its profitability outlook as it capitalizes on high-double-digit growth in China. EBay firmly rejected a $56 billion takeover offer from GameStop, calling CEO Ryan Cohen’s cash-and-stock proposal “neither credible nor attractive” amid severe concerns over financing and the resulting debt load. In the digital health space, Hims & Hers shares plunged 13% after posting a $92 million net loss and weak guidance, a drop that coincides with the firm’s agreement with Novo Nordisk to stop selling compounded versions of the weight-loss drug Wegovy. Elsewhere, General Motors laid off hundreds of IT employees as the automaker shifts toward artificial intelligence to boost productivity.

Investing & Commentary#

Despite the geopolitical turmoil, analysts at Trivariate Research point out that only 10% of the S&P 500’s market cap is forecasting a negative impact from the Iran war, though they warn investors to avoid the consumer discretionary sector. On the technology front, Wedbush’s Dan Ives predicts the Nasdaq will hit 30,000 over the next year as the AI infrastructure buildout expands to broader earnings growth. As the semiconductor rally takes a breather, Morgan Stanley notes that the shift toward “agentic AI” will drive fresh demand for new central processing unit (CPU) servers to operate alongside existing GPU infrastructure.

Also Worth Watching#

• U.K. Prime Minister Keir Starmer under pressure to map out exit: U.K. borrowing costs hit multi-decade highs as 77 Labour MPs demand the Prime Minister’s resignation following devastating local election results.
• GameStop CEO Ryan Cohen $56B eBay offer: ‘An opportunity to build a much larger business’: Ryan Cohen defended his audacious takeover bid on Squawk Box, stating GameStop has the ability to issue stock to close the transaction.
• What to expect from the upcoming Trump-Xi summit: President Trump is taking top executives to Beijing this week to discuss trade and the Iran war, though Nvidia’s Jensen Huang is noticeably absent from the delegation.
• Sam Altman testimony: Musk thought OpenAI would fail: OpenAI CEO Sam Altman took the stand in federal court, testifying that he never promised Elon Musk the company would remain a nonprofit.