Inflation report could further rattle tumultuous US markets

As recent US economic data has disappointed, one silver lining for stocks has been markets factoring in more interest rate cuts by the Federal Reserve this year

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A critical inflation report in the coming week could further rattle an increasingly tumultuous US stock market, with investors worried about an economic growth slowdown and President Donald Trump's tariffs.

Despite again on Friday, the benchmark S&P 500 marked its worst week in six months. The tech-heavy Nasdaq Composite on Thursday ended down more than 10% from its December all-time closing high, confirming it has been in a correction for several months. Investors were grappling with dramatic policy change around the world. Trump's back-and-forth implemen- tation of fresh tariffs on Mexico, Canada and China exacerbated broad concerns about the economy. Markets were also shaken by Germany's surprise spending plans, which drove a selloff in the benchmark German Bund.

As recent US economic data has disap- pointed, one silver lining for stocks has been markets factoring in more interest rate cuts by the Federal Reserve this year to account for potential growth weakening.

But Wednesday's US consumer price index report could scuttle those expectations if it confirms that inflation is still simmering at levels that force the Fed to keep monetary policy tighter.