CPI Report to Determine Fate of US Interest Rates Hike

Investors are bracing for volatility tied to next week's Consumer Price Index (CPI) report, which is Wall Street's most closely watched inflation gauge. The report will give a clear indication of whether the U.S. Federal Reserve hikes interest rates later in the month.

The S&P 500 has gained nearly 13% in 2026, underpinned by an exceptionally strong year for corporate profits. However, investors have braced for a potential pullback in September, which historically is the weakest month of the year for U.S. stocks.

Data on producer prices will be released earlier in the week and economists polled by Reuters expect a 0.4% monthly rise in August CPI, and a 0.2% rise in the core measure, which excludes the volatile food and energy components.