US Inflation Hits 3-Year High as Energy Costs Bite
US inflation jumped 3.8% year-over-year in April, the hottest reading in three years and above forecasts. Energy drove 40% of the monthly rise and was up 18% from a year earlier, reflecting the closure of the Strait of Hormuz amid the war with Iran. Core inflation climbed 2.8%, and real wages turned negative for the first time in three years. Oil is up roughly 70% since the war began, a move associated with US stocks trading around 5 percentage points below where they would otherwise sit.
Chip Stocks Add $4tn as AI Boom Sucks In the Whole Sector
S&P 500 semiconductor companies have added nearly $4tn in market cap over six weeks, with the sector now close to a fifth of the index. The SOX is up 65% year-to-date, but multiples have actually contracted slightly as earnings estimates surge. Memory has led the charge, with SanDisk up 50% in a month and Micron up 78%, while Intel and AMD have each gained around 80%. TSMC, Samsung and SK Hynix alone make up more than a quarter of the MSCI Emerging Markets index.
Amazon Staff Game AI Leaderboards With Empty Token Use
Amazon employees are inflating their AI usage to hit an internal target of 80% weekly developer adoption, running meaningless prompts to climb an internal leaderboard. The same pattern, dubbed "token maxing", has emerged at Meta. With trillions in market cap riding on AI demand being real, gamed adoption metrics raise doubts about how much enterprise AI use reflects genuine productivity.
Warsh Confirmed as Fed Governor, Clearing Path to Chair
The US Senate confirmed Kevin Warsh as a Federal Reserve governor, positioning him as a leading candidate to chair the central bank. Warsh served as a governor from 2006 to 2011, when he consistently pushed for higher rates through the financial crisis. At his confirmation hearing he declined to say whether the president lost the 2020 election, fuelling questions over Fed independence as the White House presses for cuts.