Markets brace for May CPI report showing annual inflation exceeding 4% for the first time in three years, fueling Fed rate hike concerns.
US stock futures extended losses as investors awaited May’s Consumer Price Index report, with headline inflation expected to rise above 4% year-over-year for the first time since 2021. The data follows last week’s stronger-than-expected jobs report, heightening fears of a more aggressive Federal Reserve response.
S&P 500 futures fell 0.4%, while Nasdaq and Dow futures declined 0.5% and 0.3%, respectively. Core CPI is forecast to rise 0.3% month-over-month, below the prior 0.6% gain, but the headline print remains a key focus. Markets showed volatility yesterday, recovering from early losses but closing with lingering unease.
Traders are also monitoring geopolitical tensions and the upcoming SpaceX IPO, though the CPI report remains the immediate catalyst. A hotter-than-expected print could reinforce expectations for prolonged Fed tightening, pressuring equities further.