US CPI: S&P 500 pauses after its best week since April
Published on August 10, 2026
US markets have one date circled this week. July US CPI lands Wednesday at 8:30 am ET, and it settles whether the Fed raises rates in September. The S&P 500 walks in with a record close behind it and its best week since April, yet futures are barely moving on Monday morning.
Why US CPI now drives the indices
Friday's jobs report changed the setup. Employers cut 23,000 positions in July when the market looked for an 80,000 gain. Stocks cheered. The S&P 500 rose 0.6% to 7,757.64, the Nasdaq Composite 1.3% to 26,690.62 and the Dow 0.3% to 54,036.93, according to the session recap carried by Yahoo Finance. Over the week that works out to +3.6% for the S&P 500 and +5.2% for the Nasdaq.
One idea carries the whole move. If hiring stalls, the Fed no longer has to tighten. Odds of a September rate hike fell to roughly 44%, down from 67% a week earlier, Reuters reports. Wednesday's print either backs that idea or breaks it. Until then, little else counts.
What the market expects from the print
Economists look for 3.4% year over year on the headline number and 2.5% on the core reading, which strips out food and energy. Come in at or below that, and Friday's rally holds. Come in hot, and the indices lose their best argument.
"The market has inflation anxiety. We will see this week if the inflation data gives the market a sigh of relief," said Matthew Miskin of Manulife John Hancock Investments, quoted by Reuters. Dominic Pappalardo of Morningstar Wealth put it more bluntly: if CPI snaps back higher, he expects stocks to sell off.
Oil is the thing that could break it
Brent is back at $84.42 on Monday, up about 1%, with WTI at $78.83, per Euronews. The reason is the Strait of Hormuz. Iran's Revolutionary Guards keep repeating that the blockade stays until their conditions are met, and about a fifth of the world's oil and LNG moves through that channel. Crude parked above $85 will not touch Wednesday's number, which covers July. It will shape the ones after it, and markets price inflation ahead of time.
A very calm tape going into US CPI
The VIX finished Friday at 14.88, in the lower decile of its history. CNN's Fear & Greed Index sits at 64, in greed territory. Almost nobody is hedging into the biggest event of the month.
The optimism has support. S&P 500 second-quarter earnings are on pace to rise 50% year over year, the fastest growth since the second quarter of 2021, according to Charlie Bilello, chief market strategist at Creative Planning, in comments carried by Yahoo Finance. One signal is less comforting. On Friday the Nasdaq 100 beat the S&P 500 by 1.19 percentage points, the kind of gap that shows a market leaning on a handful of names. Semiconductors are up 70% this year but still sit 15% below their late-June peak.
Key levels today
| Instrument | Level (support / resistance) | Change | Scenario to watch |
|---|---|---|---|
| S&P 500 | Support 7,600 / resistance 7,833 | +0.6% (Friday close) | Above 7,833 the record run extends. Below 7,600 July's breakout is undone and the tape turns defensive. |
| Brent | Support $83.70 / resistance $85.00 | +1.0% (Monday morning) | A clean close above $85 puts an inflation premium back into index pricing. |
| WTI | Support $77.79 / resistance $78.50 | +0.8% (Monday morning) | Below $77.79 the geopolitical premium deflates and equities get room to breathe. |
S&P 500 levels via Investtech, crude levels via Vantage.
Economic calendar
Wednesday, August 12, 8:30 am ET. July US CPI, seen at 3.4% year over year and 2.5% core. Print at 3.3% or lower and the September hike fades, opening the path to 7,833 on the S&P 500. Print at 3.5% or higher and volatility returns, putting 7,600 in play.
Thursday, August 13, 8:30 am ET. July producer prices. A hot PPI after a tame CPI cancels the relief, tech names first.
Friday, August 14, 8:30 am ET. July retail sales. Strong spending plus firm inflation hands the argument back to the rate-hike camp.
The bottom line
Markets bought the no-September-hike story on Friday and head into the week with almost no protection and a VIX on the floor. Wednesday's CPI settles it, and crude is the one thing that can spoil the setup. We run through it every morning in our market coverage.
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This is not investment advice. Informational content only.