3 Min. Market Summary
06/12/2026

Mortgage rates improved late in the week, erasing the modest increases seen earlier, as hopes for a U.S.-Iran peace deal eased concerns about rising oil prices and inflation

Earlier in the week, rates edged higher after inflation reports came in slightly above expectations and tensions in the Middle East increased. Later, rates moved back down as President Trump signaled, he would hold off on military action and reports suggested a possible peace agreement could be reached this weekend.

The good news is that inflation outside of food and energy remained fairly stable, wage growth continued to slow, and recent jobs data showed signs that the labor market is gradually cooling.

Looking ahead, next week’s Federal Reserve meeting will be the focus. Investors will be watching for clues about where interest rates may be headed and whether inflation continues to improve.

Keep reading for a full breakdown of this week’s market-moving news:

 

Labor Market (Jobs)

ADP Weekly Employment Data

• Average job creation slowed to 29,000 per week over the prior four weeks.
• The previous reading was also revised lower.
• The data pointed toward roughly 125,000 monthly jobs, closely matching ADP’s May employment estimate.

Initial Jobless Claims

• New unemployment claims rose to 229,000.
• Continuing claims increased to 1.8 million.
• Claims have been trending gradually higher, suggesting some softening in the labor market.

Atlanta Federal Reserve Wage Tracker

• Wage growth slowed from 3.6% to 3.5% year over year.
• Job stayers saw wage growth decline from 3.6% to 3.3%.
• Job switchers saw wage growth ease from 3.8% to 3.7%.
• Wage growth remains below inflation, resulting in negative real wage growth.

Inflation

Consumer Price Index (CPI)

• Headline inflation rose 0.5% in May and increased from 3.8% to 4.2% year over year.
• Most of the increase was tied to higher oil and gasoline prices.
• Core inflation rose 0.2%, better than expected.
• Core inflation increased only slightly to 2.9% year over year.
• Shelter and airline fares accounted for most of the core inflation increase.

Producer Price Index (PPI)

• Headline wholesale inflation rose 1.1% in May.
• Annual producer inflation increased from 5.7% to 6.5%.
• Core producer inflation rose 0.4% for the month but remained at 4.9% year over year.
• Higher oil prices were the largest contributor to wholesale inflation.
• Strong stock market gains also boosted portfolio management costs, which contributed meaningfully to the core reading.

Economic Reports and Forecasts

Existing Home Sales

• Existing home sales increased 3.2% in May to an annual pace of 4.17 million.
• Sales were up 3.2% from a year ago.
• Inventory increased to 1.55 million homes.
• Months’ supply rose to 4.5 months, close to a balanced market.
• First-time buyers accounted for 35% of purchases, the strongest share since 2020.
• The data suggested the housing market remains resilient despite elevated mortgage rates.

ICE Home Price Index

• Home values increased 0.27% in May.
• Home prices rose in 90% of tracked markets.
• Annualized appreciation was running near 3.5%.
• Home values continued to hold up despite higher borrowing costs.

Federal Reserve and Monetary Policy

Federal Reserve Outlook

• Markets focused heavily on the upcoming Federal Open Market Committee meeting, the first under Chair Kevin Warsh.
• Rising inflation increased discussion around potential rate hikes.
• Some analysts believe higher oil prices are driving inflation and that monetary policy has limited ability to address supply-driven energy pressures because rate hikes won’t open the Strait of Hormuz.
• Slowing wage growth and softening labor data may help offset some inflation concerns.

Other

US-Iran Conflict and Oil Prices

• Markets reacted throughout the week to changing headlines surrounding military activity and negotiations involving the US and Iran.
• Oil prices climbed sharply early in the week amid escalating tensions, contributing to higher inflation readings.
• By Friday, renewed optimism around a peace agreement pushed oil prices to their lowest level in two months.
• Lower oil prices improved sentiment for stocks and mortgage-backed securities and could ease inflation pressure if the trend continues.

Treasury Market Demand

• Foreign demand for US Treasuries weakened as higher oil prices increased the need for dollars abroad.
• Reduced foreign Treasury purchases contributed to upward pressure on yields and mortgage rates during the week.

SpaceX Initial Public Offering (IPO)

• SpaceX launched the largest IPO in history with an estimated valuation of $1.75 trillion.