Inflation Data to Decide Fed Rate Hike Fate: S&P 500 Investors on Edge

Investors are eagerly awaiting next week's inflation data, which could determine whether the U.S. Federal Reserve hikes interest rates at its September meeting. The S&P 500 has gained nearly 13% in 2026, but investors have braced for a potential pullback in September, historically the weakest month of the year for U.S. stocks.

The upcoming Consumer Price Index (CPI) report on September 11 will be closely watched, as it is Wall Street's most closely followed inflation gauge. Economists polled by Reuters expect a 0.4% monthly rise in August CPI, and a 0.2% rise in the core measure, which excludes food and energy components.

With inflation consistently above the Fed's 2% annual target for several years, the prior month's CPI reading showed prices barely increased. The upcoming CPI print will confirm whether that cooling trend continues.