Everything You Need to Know
Before Markets Open Today

Thursday’s Producer Price Index data landed harder than Wall Street expected. Wholesale prices are now rising at their fastest pace since late 2022 — a clear sign that inflation pressures haven’t gone away. Despite the miss, major indices held earlier gains after the data, suggesting markets had already partially priced in sticky inflation.

The PPI report matters because wholesale prices typically filter through to consumers within months. With Brent crude holding above $100 per barrel amid ongoing Middle East tensions, energy remains the stickiest component. The US confirmed it was done with the latest round of strikes in the Persian Gulf, which briefly pushed crude lower — but analysts say the risk premium is far from gone.

The Fed has now held rates steady through its first three meetings of 2026. Under Fed Chair Kevin Warsh, the emphasis has shifted firmly toward inflation credibility. The May jobs report — printing a massive 172,000 new positions against an 85,000 forecast — has effectively closed the door on rate cuts this year.

Markets are instead pricing in roughly a 50% chance of a rate hike by year-end. The June 16–17 FOMC meeting will be watched closely not just for the rate decision, but for the statement and press conference language. If the Fed signals more concern about inflation persistence, expect Treasury yields and the dollar to strengthen further — putting additional pressure on growth stocks.

Consumer sentiment has collapsed to levels not seen since the dark days of June 2022. The May final print of 44.8 — revised sharply down from the 48.2 preliminary — reflects deep anxiety about gasoline prices and the ongoing cost of living squeeze. The Strait of Hormuz disruptions have kept energy prices elevated, and roughly one-third of consumers spontaneously cited fuel costs in surveys.

This morning’s June preliminary release is the last major read on household confidence before the FOMC meeting. A further drop could reinforce the argument that economic activity is softening — potentially giving the Fed reason to pause rather than hike. Conversely, if sentiment firms, it supports the case that consumers are still resilient enough to absorb higher rates.

Oracle already reported Q4 results after Wednesday’s close. The AI infrastructure buildout remains the core thesis — with consensus expecting $1.96 in EPS, a 15.3% year-over-year gain. Cloud demand and any guidance on AI capacity spend will be the market’s focus. Later in the month, Accenture and Kroger will offer a window into corporate IT budgets and grocery-sector inflation dynamics respectively.

Today’s session is shaped by a collision of forces: sticky inflation confirmed by yesterday’s PPI, a consumer confidence figure hitting record lows, and a central bank meeting next week that could surprise in either direction. Markets are threading a narrow needle.

The University of Michigan reading at 10:00 AM ET is the morning’s pivot point. If it prints below May’s 44.8, expect a wave of risk-off selling — particularly in consumer discretionary and growth stocks. A surprise recovery above 50 could flip sentiment and set the stage for a bounce into the weekend.

Oil remains the wildcard. Brent above $100 acts as a continuous tax on consumers, feeding both the inflation data and the collapsing sentiment readings. Watch the Persian Gulf headlines as closely as any economic print today — energy shocks have become the dominant driver of this market cycle.

In short: Stay nimble, watch 10:00 AM closely, and keep positions sized for a volatile close to the week before a high-stakes FOMC meeting.