Morning Bid: Inflation Concerns and Market Reaction Ahead of US CPI Report

The Reuters article by Naomi Rovnick [1] highlights growing inflation concerns on Wall Street as markets await the December 18, 2025 US Consumer Price Index (CPI) report. Market data shows the S&P 500 ETF (SPY) closed down 0.27% on December 17 with trading volume ($91.86M) exceeding the 80.40M average [0], indicating heightened activity amid uncertainty. The previous day (December 16) saw mixed index performance: S&P 500 flat (+0.00%), NASDAQ Composite up 0.56%, Dow Jones Industrial Average down 0.55% [0]. Sector results reflected risk aversion, with defensive Utilities leading gains (2.1%) while Energy declined most (-0.88%) [0]. Though UK inflation dropped to an 8-month low (3.2%) on December 17, the article focuses on US inflation dynamics [0].

1. SPY’s slight decline with above-average volume suggests investors are positioning cautiously ahead of the CPI report.
2. Defensive sector (Utilities) outperformance indicates a shift toward less volatile assets amid inflation uncertainty.
3. Mixed index performance on December 16 reflects ongoing ambiguity about inflation and monetary policy implications.

• Risks
  : A higher-than-expected CPI reading could trigger short-term market volatility as investors reassess interest rate expectations [0].
• Opportunities
  : Defensive sectors may attract continued interest if inflation concerns persist, while growth sectors could benefit from a lower-than-forecast CPI outcome [0].

Core event: Inflation concerns ahead of December 18 US CPI report [1]
SPY performance (Dec 17): -0.27% close, $91.86M volume (above $80.40M avg) [0]
Dec 16 index performance: S&P flat, NASDAQ +0.56%, Dow -0.55% [0]
Dec 17 sector performance: Utilities +2.1%, Energy -0.88% [0]