The Day Ahead: Markets Brace for CPI as Inflation Data Hits Today

Market Overview

U.S. stock futures are under pressure Tuesday morning following Monday’s strong rally, as traders await key April inflation data. S&P 500 and Nasdaq 100 futures are both down 0.4–0.46%, while Dow futures are off by 108 points.

Monday’s surge was driven by a U.S.-China agreement to reduce tariffs, with the Dow jumping over 1,100 points and the S&P 500 gaining more than 3%. The Nasdaq Composite led with a 4.4% advance, its best session since April 9. Markets now pivot to inflation data as the primary driver for today’s trade.

Key Economic Releases

At 12:30 GMT, April’s U.S. Consumer Price Index (CPI) and Core CPI are set for release. Consensus expects CPI to rise 2.4% YoY, matching March’s pace, and Core CPI to hold at 2.8% YoY. Month-over-month projections are +0.3% for both headline and core.

The Fed will closely monitor this data for signs of persistent inflation pressures, particularly in core services less housing—“super core” inflation—which dipped to 2.9% in March. Any upside surprise could influence near-term rate expectations.

Notable Earnings

Before the bell, several earnings reports may sway individual names:

• Camtek (CAMT) is expected to post EPS of $0.77.
• CyberArk Software (CYBR) is projected at $0.79.
• Sea Limited (SE) is forecast at $0.81.
• Tencent Music (TME) leads with an estimate of $1.26 EPS.

After the close, watch for:

• Exelixis (EXEL) with a $0.36 EPS consensus.
• CAE (CAE) is expected to deliver $0.33 EPS.
• KinderCare (KLC) is projected at $0.17 EPS.

Notably, Coinbase (COIN) surged 8% in after-hours trading after being added to the S&P 500, effective May 19, replacing Discover Financial. This comes as Bitcoin recently topped $100,000, adding to upside sentiment in crypto-linked equities.

Commodities, Crypto, and Bonds

Gold remains near a one-week low, holding around $3,228, as risk appetite improves post-tariff truce. U.S. 10-year Treasury yields are flat at 4.459% after Monday’s uptick. The safe-haven bid has weakened, reflecting reduced recession odds—Goldman Sachs now pegs U.S. recession risk at 35%, down from 45%.

Technical Outlook

The S&P 500 futures are stalling near the 200-day SMA at 5,873, which aligns with recent highs. A confirmed break above this level could trigger accelerated upside momentum. Initial downside levels to watch include 5,586 (50-day SMA), 5,431, and 5,286.50. Traders should expect volatility around CPI data, with price action likely to be headline-driven.

Outlook

Today’s trade hinges on the April CPI report and its implications for Fed policy. With futures softer following Monday’s surge and resistance in play on technical charts, markets are vulnerable to an inflation surprise. Watch the 200-day SMA as a technical trigger and inflation readings as the primary macro catalyst.

More Information in our Economic Calendar.