Wall Street waits for the October inflation report on Tuesday, with economists expecting a 0.3 percent monthly rise in October, after Monday delivered the best day for stocks since April. The S and P 500 jumped 2.35 percent to 7,549.94, the Nasdaq gained 2.74 percent, and the Dow added 1,104 points, and now the inflation number gets the final word on whether the bounce can hold.
Why it matters
The consensus is narrow. The Reuters poll calls for a 0.3 percent monthly rise, down from 0.6 percent in September, and the Bloomberg survey has core inflation at 0.2 percent. Forecasts for the headline range from 0.1 percent to 0.5 percent, and the difference between the top and the bottom of that range is the difference between a rally and a rout.
The report will be missing something unusual. There will be no official annual rate, because last year 43 day shutdown stopped the Bureau of Labor Statistics from collecting October 2025 prices. Economists put their own estimate near 3.9 percent, up from 3.7 percent, but the official year over year figure will not appear, and the monthly number will carry the whole weight of the day.
What happens next
The market has already priced the outcome it expects. Traders see about an 80 percent chance of a Federal Reserve rate hike in December, and Governor Christopher Waller has said the Fed ought to raise rates even if inflation cooled. At 8:30 a.m. Eastern, the number will show whether that confidence is justified, and the levels to watch are 7,456 on the S and P 500 and 24,579 on the Nasdaq. At 5:04 a.m. Central, Nasdaq 100 E-minis were down 0.35 percent, Dow E-minis up 0.3 percent and S and P 500 E-minis little changed, according to Reuters.
What happens next will be decided in the first minutes after the release. If core prints 0.3 percent or higher, expect higher yields, a firmer dollar and pressure on stocks. At 0.1 percent, Monday bounce has room to extend. Either way, Tuesday is the day the market has been waiting for, and the wait ends at 8:30. The last CPI report before the Fed December meeting will be out in a few hours, and the market will read it as a verdict on the December hike.
