U.S. Markets Slide Ahead of Key Inflation Data Releases

Wall Street kicked off the week with losses on Monday (August 11), as investors turned cautious ahead of critical U.S. inflation reports expected later this week, largely shrugging off positive developments in U.S.-China trade relations.

At the close of trading, the Dow Jones Industrial Average dropped 200.52 points, or 0.45%, to end at 43,975.09. The S&P 500 dipped 0.25% to 6,373.45, while the Nasdaq Composite declined 0.3%, settling at 21,385.40.

Inflation Reports to Steer Fed's Next Move

All eyes are on this week's inflation data, which could significantly influence the Federal Reserve’s decision-making ahead of its upcoming policy meeting in September 2025.

The Consumer Price Index (CPI) is scheduled for release on August 12, followed by the Producer Price Index (PPI) on August 14. These figures are expected to shape expectations around interest rates in the near term.

According to estimates by Dow Jones, July CPI is projected to rise 0.2% month-over-month and 2.8% year-over-year. Core CPI, which excludes food and energy, is forecast to increase 0.3% monthly and 3.1% annually—both slightly higher than June's respective readings of 0.2% and 2.9%.

Jackson Hole Symposium Looms Large

These inflation readings will precede the high-profile Jackson Hole Economic Symposium, set to take place from August 21–23 in Wyoming. The event is expected to offer critical insights into the Fed’s future policy path.

Currently, market pricing indicates an 87% probability of a rate cut at the Fed’s September 2025 meeting, based on CME FedWatch data. However, Sam Stovall, Chief Investment Strategist at CFRA Research, told CNBC that investors may be overly optimistic in their expectations for monetary easing.

Trade Policy Takes a Back Seat

In contrast, Monday’s market reaction was muted toward trade developments. Investors paid little attention to news that President Donald Trump signed an executive order to extend tariffs on Chinese goods by 90 days—just hours before a previous temporary suspension was set to expire.