CNBC Business News Update - Market Midday: Stocks Lower, April Inflation Higher Than Expected, Warsh Takes A Step Toward Fed Chair 5/12/26

Episode Date: May 12, 2026

The CNBC Business News Update with Jessica Ettinger features market numbers & news with CNBC expert analysis and sound from top business names. Updated throughout the business day. Visit https://www.cnbc.com/ for more. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

I'm Jessica Eddinger, CNBC. Wall Street is in the red this afternoon. The S&P 500 index in the NASDAQ falling from the record highs they opened with the Dow in the red, down 113 points. Caterpillar shares leading it lower. They're down 3%. The S&P 500 index falling 72 points. That's 1%. And the NASDAQ down 523 points. That's 2%. Kevin Warsh has taken another step to where. becoming Federal Reserve Chair, clearing a key Senate vote that puts him on the Central Bank Board of Governors next up for Warsh, who had been on the board previously, is the vote to be chair, which is expected Wednesday. Current Fed Chair Jay Powell's term as chair ends Friday, but he remains on the board if he so chooses. Inflation went in the wrong direction again last month. April CPI, the Consumer Price Index, year over year, hotter than expected 3.8 percent. All eyes on the U.S. consumer. On the one hand, they're having to deal with higher energy prices, but on the other hand, you know, they had lower tax payments that were due April 15th or bigger refunds. And so that's cushioning them for now. The thing that we're worried about in others is that tax-related stimulus that wears off this summer, that's when we see

weakness on the consumer side. It will be a hit to real incomes. It just means less money to spend in other areas going into the summer travel season, lodging, airfares, maybe driving less. Pimcoe economist Tiffany Wilding on CNBC. Where did prices rise the most? Gasoline of all types, up 28% last month. Airfares up nearly 21%. Tobacco up 7.5%. Fruits and vegetables up 6.1%. Truck to stores using diesel fuel, which of course soared. Where did prices fall? There were a couple of categories. Used car and truck prices fell about 2%. Dairy product prices actually dropped about a half a percent last month. Moody's economist Mark Zandi tells CNBC Americans may soon feel that price increases around them are outpacing their raises. Workers who got a 3% raise this year, well, they're underwater with

inflation at 3.8%. Up till now, wage grows, income. the growth and incomes have outpaced the rate of inflation. So the so-called, you know, real income or real wage growth has been positive. People's purchasing power has been increasing, at least in aggregate. You know, it varies where you are in the wage distribution, but, you know, broadly speaking. But that's now changing, you know, with inflation in three and a half to four percent. Some alarming new data on how Americans are doing with their debt. More people are struggling to make payments.

This is first quarter data from the New York Fed. Look at the 90-plus-day delinquencies. Overall, a nine-year high. Credit cards at a 15-year high, above 13 percent and not been there since the wake of the great financial crisis. All the loans at an all-time high for the series for delinquencies, and the series goes back to 2003. Mortgages, eight-year high and student loans, a seven-year high. Mortgage debt, auto loan, student loans, they were all flat in terms of their volume and total level or up just modestly. Credit card balances actually fell. Senior Economics Reporter, Steve Leesman. Jessica Eddinger, CNBC. Week nights. There are plenty of people who get too enthusiastic right about now. Every time there's a rally, they think that anything they buy goes higher. They actually think they're geniuses.

They lost all this, but they're too cocky. Mad Money, Weeknight, Six Eastern, and streaming on CNBC Plus.