Markets & trading FAQ

The CPI measures US inflation. A hotter-than-expected print pushes the Fed to keep rates high, which weighs on stocks and risk assets; a softer print fuels hopes of a rate cut and supports the market.

Gold is priced in dollars. When the greenback strengthens, an ounce becomes more expensive for buyers in other currencies, which cools demand and pressures the price.

At 8:30 a.m. Eastern, which is 2:30 p.m. in Paris. It is one of the most closely watched macro releases of the month.

Persistently expensive crude raises energy, transport and production costs. These pressures feed into consumer prices and make it harder for central banks to bring inflation back to target.

In risk-on mode investors favor risk assets such as stocks or crypto. In risk-off mode they rotate into safe havens like the dollar, gold or government bonds.

The FOMC is the Federal Reserve's monetary policy committee. It meets eight times a year to set the policy rate, a decision that directly moves stocks, the dollar and gold.

The VIX gauges the expected 30-day volatility of the S&P 500 based on options prices. Above 20 it signals higher-than-normal nervousness; below 20, calmer markets.

About a fifth of the world's oil passes through Hormuz. Its closure had built a risk premium into prices; reopening it removes that supply threat, so prices fall.

The Fed keeps its policy rate unchanged. In June 2026 the range is still expected at 3.50-3.75%, with markets focused on the statement's tone and the projections.

It is the extra yield investors demand to hedge against higher-than-expected inflation, here fueled by the spike in oil prices.

Cheaper oil lowers costs for companies and households and eases inflation pressure. That gives central banks more room to cut rates, which tends to support equity markets.

Close to a fifth of the world's oil passes through the Strait of Hormuz. Any threat to the passage pushes energy prices up, while reopening it sends them lower and eases inflation fears.

The dot plot is a chart where each Fed official marks their expected path for the policy rate. Investors read it to gauge how many hikes or cuts the central bank foresees.

A central bank raises its policy rate when inflation stays above target. Higher rates cool demand but weigh on stocks and tend to lift the dollar.

It is the chart where each Fed official anonymously marks where they expect the policy rate over the coming years. The median of those dots gives the market a guide to likely hikes or cuts.

Close to a fifth of the world's oil passes through this channel between the Gulf and the Indian Ocean. Any threat to traffic lifts prices, while any reopening eases them.

The dot plot is the chart where each Fed committee member anonymously marks the policy rate they expect. When the dots move higher, they signal a more restrictive, hawkish stance.

CNN's Fear & Greed Index sums up market mood on a 0 to 100 scale. Below 25 signals fear, above 75 greed, and a reading near 37 points to cautious, risk-averse sentiment.

The PCE is the price index tied to consumer spending and the Federal Reserve's preferred inflation gauge. A high PCE pushes the Fed to keep rates elevated, which weighs on stocks, while a softer reading supports risk assets.

The Middle East accounts for a large share of oil production and transit, notably through the Strait of Hormuz. Any threat to supply, such as a conflict involving Iran, lifts crude prices and can rekindle inflation.

A strong dollar makes dollar-priced commodities and US exports more expensive and tightens global financial conditions. It often pressures gold, emerging-market currencies and risk assets.

Raising the policy rate makes credit more expensive and cash more rewarding, which dims the appeal of stocks and crypto. It tends to support the dollar while weighing on gold and other risk assets.

A higher policy rate raises borrowing costs and lifts the risk-free return, which dims the appeal of equities, especially tech stocks whose valuations rest on future earnings.

In a price-weighted index like the Dow Jones, each stock counts according to its share price, not its market value. A higher-priced stock therefore moves the index more than a cheaper one.

Buying the dip means stepping in after a market drop, betting on a rebound. The approach carries real risk if the decline keeps going instead of reversing.

Nonfarm payrolls gauge the strength of the labor market, which the Fed watches closely. A hot or cold print shifts rate expectations and quickly moves stocks, the dollar and gold.

Released monthly by the BLS, it tracks nonfarm payroll growth and the unemployment rate. It is one of the most watched indicators because it shapes expectations for Fed policy.

When a handful of large stocks, often in tech, drive most of an index's gains, the rally is called narrow. It leaves the market more exposed if those names turn.

It gauges the health of the labor market, which drives the Fed's rate decisions. A strong or weak print shifts expectations and moves stocks, the dollar and bonds.

The central bank favors high rates, or even hikes, to contain inflation. Costlier credit tends to weigh on growth stocks.

It is the expected trajectory of the US policy rate. Markets reprice it with each jobs or inflation release, which moves bond yields, the dollar and equities.

A cooling labor market strengthens bets on a Fed rate cut. Cheaper money supports valuations, which is why equities often rally on disappointing payroll figures.

They are the detailed record of the Fed's last meeting, released three weeks later. Investors scan them for the members' tone on inflation and the timing of policy rate cuts.

When a company joins a major index like the Nasdaq 100, funds that track the index must buy the stock, creating mechanical and sometimes large flows that can weigh on the rest of the index.

AI-linked stocks often trade at rich multiples. When demand or margins are questioned, investors sell quickly, which magnifies swings across the technology indices.

Gold is priced in dollars and pays no interest. When the Fed sounds firm and the greenback climbs, holding metal becomes costlier than interest bearing bonds, which weighs on the price even during geopolitical tension.

Earnings season is the stretch when companies report their quarterly results. In the US it opens with the big banks and sets the market's tone: profits above expectations lift the indexes, while disappointing numbers pull them down.

Retail sales track household spending, the main engine of the US economy. A strong number reassures investors about growth; a weak one revives slowdown fears and weighs on stocks.

The SOX (Philadelphia Semiconductor Index) tracks about 30 US chip stocks. Highly sensitive to the cycle and to AI demand, it serves as the sector's benchmark.

It's the price swing options markets expect right after an event like earnings. It comes from short-dated options pricing. The higher it is, the bigger a reaction traders expect.

When a company raises its AI spending above what investors expected, near term profit and free cash flow take a hit. Shares can fall even with strong revenue growth, until that spending proves it pays off.

Higher tariffs raise the cost of imported goods and can squeeze corporate margins and global growth. Markets also worry about retaliation from targeted countries, which adds to the uncertainty.

Chip-related tech names carry heavy weight in the Nasdaq. When giants like Nvidia fall sharply, the index follows mechanically, even if other sectors hold up better.

A surprise hike tightens financial conditions faster than expected. It typically pushes the dollar and bond yields higher, and weighs on stocks and gold until the market prices in the new rate path.

A dissent is when one or more FOMC members vote against the majority rate decision. Three dissents in favor of a hike, as seen in late July 2026, signal growing disagreement over how much inflation the Fed can tolerate.

The Fed wants to see inflation clearly move back toward its 2% target first. As long as it stays elevated, it prefers to hold rates steady rather than risk reigniting price pressures.

It's the Fed's preferred inflation gauge. It tracks consumer price changes excluding food and energy and anchors the central bank's rate decisions.

Japan and the US intervened jointly to slow the dollar's rise against the yen, which had neared a 40-year high. The Bank of Japan also signaled it could raise rates further, accelerating the dollar/yen pullback.

JOLTS tracks the number of open jobs across the US economy each month. A falling number points to a cooling labor market, which can push the Fed toward earlier rate cuts.

ADP tracks monthly private sector hiring in the United States. It lands two days before the official BLS jobs report and works as an early read, though the two numbers often diverge.

Cheaper crude lowers energy costs for companies and households, which helps margins and cools inflation worries. Markets usually read it as a green light for equities, unless the drop signals weakening demand.

It compares the volume of put options with call options. A low reading means traders are betting heavily on further gains, which often points to optimism that has run ahead of itself.

They track wage pressure, which feeds inflation. Faster wage growth pushes the central bank to keep rates high, even when hiring comes in soft.

Headline CPI covers all consumer prices, including food and energy. Core CPI strips those two out because they swing too much, leaving the underlying trend that the central bank actually tracks.

The CME FedWatch tool derives the probability of a Fed move at the next meeting from fed funds futures. Those odds shift daily as new data lands and act as the market's barometer for policy.

The producer price index tracks the wholesale prices producers receive. It often leads consumer inflation, which makes it an early signal that markets watch closely.

Released every Thursday, they count new US unemployment benefit filings. They are the freshest read on the labour market, so traders use them as a weekly gauge of the economy.

It is a monthly survey of roughly 500 US households run by the University of Michigan, tracking how confident they feel and what inflation they expect. Traders watch it because weak confidence usually shows up in spending later.

The control group strips out autos, gasoline, building materials and food services from the headline number. It feeds straight into the GDP calculation, so it often moves markets more than the headline print.

The 10 year and 30 year yields are the benchmark used to value equities. When they rise, future profits are worth less today, which compresses valuation multiples and caps the indexes.

It is the price of money over the very long run. When it rises, future corporate profits are worth less today, and growth stocks take the hit first.

Costlier crude raises input costs for companies and revives inflation. Markets then price higher rates for longer, which compresses equity valuations.

Growth companies earn most of their profits far in the future. When long bond yields rise, those future profits are worth less today and the cost of funding new investment goes up.

Higher rates make borrowing more expensive and bonds more attractive. Future company profits are worth less in today's money, which hits growth stocks hardest.

It is the annual gathering of central bankers held in Wyoming each August. The Fed chair's speech there is often used to prepare markets for the next moves in monetary policy.

Costlier crude feeds through to company costs and inflation. That pushes the central bank to keep rates high for longer, which weighs on equity valuations.

It is the benchmark used to value future earnings and it sets the cost of credit. When it rises, growth assets such as tech become mechanically less attractive.

When a single company accounts for a large share of an index's market value, its report drags the index with it. Traders also reprice the entire sector, which amplifies the move.

The PCE index tracks the prices US households actually pay. It is the inflation gauge the Federal Reserve watches most closely when setting its policy rate, more so than the CPI.

Nvidia carries heavy weight in the S&P 500 and the Nasdaq, and its sales work as a thermometer for global AI spending. A disappointing guide usually drags the wider technology sector and the indexes down with it.

The Nasdaq Composite covers more than 3,000 companies listed on the Nasdaq market, while the Nasdaq 100 keeps only the 100 largest non financial names. The futures traders use almost always track the Nasdaq 100.

This narrow passage between Iran and Oman carries a large share of the world's seaborne crude and liquefied gas. Any threat to shipping there lifts the risk premium built into the price of a barrel.

The ISM manufacturing index is a monthly survey of US factory purchasing managers. A reading above 50 signals expansion and below 50 signals contraction, which makes it a leading indicator the Fed watches closely.

The US 10-year yield is the benchmark used to value equities. When it climbs, future earnings are worth less today and bonds become a credible alternative, which weighs most on growth stocks.

Published monthly by the Institute for Supply Management, it tracks activity in the US services sector, which makes up the bulk of the economy. A reading above 50 means expansion, below 50 means contraction.

It sits alongside payroll growth. A rise in unemployment lowers rate expectations, which tends to support equity indices while weighing on the dollar.

The BLS revises the prior two months with every release. A large revision can change the read on the trend and move markets as much as the headline number.

The European Central Bank sets the policy rate for the euro area. A hike usually supports the euro and weighs on European indexes, while a more cautious tone does the opposite for EUR/USD and the DAX.

The 2-year Treasury yield tracks what the market expects the Federal Reserve to do with its policy rate. When it rises quickly, investors are pricing tighter policy, and that usually weighs on equity indexes.

The Nasdaq 100 tracks the 100 largest non financial companies listed on the Nasdaq, while the Composite covers more than 3,000. Traders follow Nasdaq 100 futures because the index concentrates the big tech weights.

A gamma wall is a price level where a large amount of options open interest sits. Market makers hedge around that level, which often slows an index down as it gets close.

The 10-year yield is the risk-free benchmark used to value equities. When it rises, rich valuations get harder to justify and stock indices often come under pressure.

The 10-year Treasury yield anchors borrowing costs across the US economy. When it climbs, a risk free bond pays as much as equities, so index valuations have to come down.

It is the third Friday of March, June, September and December, when stock options, stock index options and stock index futures all expire on the same day. Volume spikes and price moves often turn mechanical.

Gamma measures how option sellers must adjust their hedges when the market moves. With positive gamma they dampen swings. With negative gamma they amplify them.

Japan long served as the cheap funding source for global positions. When its policy rate rises, the yen and Japanese bonds become more attractive, which can pull capital back toward Tokyo.

The two countries account for a large share of the world economy. A deal lowers tariffs and company costs, a breakdown does the opposite, and US indexes reprice almost immediately.

The flash PMI is an early estimate of business activity, released before the final figures. Above 50 means activity is expanding, below 50 means it is contracting.