U.S. Delayed CPI Report: Pre-Release Market Volatility and Inflation Uncertainty

The U.S. economic landscape faces uncertainty following a 43-day government shutdown that disrupted economic data collection, resulting in the cancellation of the October CPI report and the delay of the November CPI from December 10 to December 18, 2025 [2]. A MarketWatch article [1] published on December 17 highlighted rising inflation before the shutdown, amplifying investor anxiety ahead of the rescheduled CPI release. On the same day, major U.S. equity markets reacted with losses: the S&P 500 fell 0.88% to 6,740.46, the NASDAQ Composite declined 1.25% to 22,823.36, and the Dow Jones Industrial Average dropped 0.30% to 47,968.29 [0]. Trading volumes were significantly below average (e.g., 1.54B vs. 5.44B average for the S&P 500), indicating a cautious, risk-off stance among investors [0]. The Fed had recently delivered its third quarter-point rate cut of 2025, but markets have only priced in two quarter-point cuts for 2026 [3]. The upcoming CPI report is expected to be a critical catalyst for adjusting these expectations.

1. Data Disruption Amplifies Volatility
   : The government shutdown’s impact on economic data flow (canceling October CPI, delaying November’s) has left markets with incomplete information, increasing caution. The S&P 500 has fallen 2.6% since its December 11 record high, and the NASDAQ has declined 4.2% since its December 12 peak [0].
2. Rate Sensitivity Drives Sector Performance
   : The NASDAQ’s larger decline (-1.25%) compared to the Dow (-0.30%) reflects greater vulnerability in rate-sensitive sectors like tech, which are more exposed to changes in Fed policy expectations [0].
3. Thin Volumes Raise Amplification Risk
   : Below-average trading volumes on December 17 could lead to more exaggerated market movements when the CPI data is released, as there are fewer market participants to absorb price shocks [0].

• Risks
  :
  • A hotter-than-expected CPI report could reduce 2026 Fed rate cut expectations further, leading to rising bond yields and pressure on long-duration tech and AI stocks [4].
  • Fed policy uncertainty may persist as the central bank reevaluates inflation trends, potentially extending market volatility [3].
  • The shutdown’s impact on CPI data accuracy remains unclear, adding an additional layer of uncertainty for investors [2].
• Opportunities
  :
  • A softer CPI print could validate current rate cut expectations, triggering a relief rally, particularly in small caps/cyclicals, while stabilizing tech sectors [4].
  • Resolution of the data backlog (including the CPI report) could provide clearer economic visibility, reducing market uncertainty in the short term.

This analysis focuses on the market’s reaction to a delayed CPI report amid rising pre-shutdown inflation and a 43-day government shutdown. Key points include:

• Major U.S. indices declined on December 17 with low trading volumes, reflecting investor caution.
• The CPI report is critical for shaping 2026 Fed rate cut expectations, with two primary scenarios (inflation re-awakening vs. Goldilocks catch-up) driving market sentiment [4].
• Information gaps remain, including the actual CPI data, the shutdown’s impact on data accuracy, and sector-specific performance details post-report release.