When is US CPI report and how could it affect S&P 500?

US CPI Overview

Thursday's US economic docket highlights the release of the critical US consumer inflation figures for May, scheduled later during the early North American session at 12:30 GMT. The headline CPI is expected to rise by a modest 0.4% during the reported month. Conversely, the yearly rate is anticipated to have accelerated to 4.7% from 4.2% in April. At the core level, the CPI is predicted to have increased 0.4% in May and the yearly rate is projected to come in at 3.4%, up from 3% prior.

According to analysts at Deutsche Bank: “We are of the view (shared by the Fed’s leadership) that this current episode is likely to prove temporary thanks to one-off factors such as those associated with the economic reopening and base effects. Indeed, the strength in core CPI last month was largely due to categories at the epicentre of the covid pandemic, where there were likely severe supply/demand imbalances related to reopening or stimulus-boosted demand.”

How could it affect S&P 500?

The US CPI will be another important macro data that would set the tone for the upcoming FOMC meeting on June 15-16. The Fed has repeatedly mentioned that rising prices will be temporary as the economy continues to rebound from the pandemic-induced recession. The markets also seem aligned with the Fed's dovish view. A softer reading will further reaffirm the transitory narrative and remain supportive of the underlying bullish tone in the financial markets.

That said, a sharper-than-anticipate increase will put heavy pressure on the policymakers to defend their views and fuel speculations that the Fed might begin discussion on tapering its bond purchases. An overshoot will also fuel concerns that there is more than the low base effect that is pushing prices higher and trigger a bit of panic in the markets. This could act as a headwind for perceived riskier assets, like equities. However, investors are likely to see if inflationary pressure is sustainable, suggesting that immediate reaction is more likely to be short-lived.

Key Notes

  •   US CPI May Preview: Inflation angst is coming

  •   S&P 500 Elliott Wave analysis

  •   S&P 500 (SPX, SPY) Technical Levels: Records are there to be broken, and that is 2021's trend

About the US CPI

The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

GME stock positioned for another short squeeze

Get the full analysis and chart in our Insights. Upgrade to Premium today    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD loses 1.21 as the dollar extends its gains

EUR/USD has dipped below 1.21, some 70 pips down on the day as the dollar recovers alongside Treasury yields. US Consumer Sentiment beat estimates with 86.4 points. 


GBP/USD retreats amid UK GDP miss, reopening concerns

GBP/USD is hovering around 1.4150, down on the day. UK GDP missed with 2.3% in April and a four-week delay to Britain's reopening is speculated. The greenback is gaining some ground.


XAU/USD drops back below $1900, as US dollar rebounds ahead of data

Gold price has retraced below the $1900 mark once again, having tested Tuesday’s high near $1903. The latest leg down in gold price comes on the back of a tepid bounce staged by the US dollar, as the Treasury yields trim losses across the curve.

Gold News

Ethereum price prepares for a bullish weekend, targeting $3,000

Ethereum price seems prime to revisit $3,000. Although ETH faces resistance at $2,300, the upswing seems imminent. A downswing below $2,000 could invalidate the bullish thesis. 

Read more

Hot Inflation is warming the seat for the June FOMC

Americans are seeing the fastest price increases since their seventh-graders were born as inflation builds into the US economy from the disruptions of the pandemic lockdowns. Core CPI at 3.8% is the steepest gain in 29 years.

Read more