A trader works on the floor of the NYSE
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York on March 18, 2026. Wall Street stocks dipped early Wednesday after data showing an unexpected jump in producer inflation added to anxiety about a Federal Reserve decision later in the day. ANGELA WEISS / AFP via Getty Images

The Wall Street will be awaiting cues from key inflation-related updates this week.

On Thursday, the US will release its August the Producer Price Index (PPI) report, an indicator of inflation at the wholesale level, the Associated Press reported. The PPI report will provide details on prices for businesses before these are passed along with the costs to consumers.

A day after the US Consumer Price Index (CPI) for August would be out. The CPI is a keenly followed indicator that provides details on price changes for specific grocery items, furniture, and clothing, apart from providing details on price shifts for services ranging from car maintenance to travel and restaurant dining.

The reports will give Wall Street and the Federal Reserve a heads up on the trajectory of inflation in the US. The rate of inflation has been hovering above 3% stoking concerns among businesses and households. The pace of inflation has also left wage growth way behind, adding another layer of economic misery on households.

Rising energy prices due to the Middle East conflict have been stoking inflationary concerns across the globe, mainly due to the closure of the Strait of Hormuz. A fifth of the world's energy cargoes passed through the contentious waterway before the conflict. Now, Iran has virtually shut it and the US has enforced a naval blockade of Iran, further fuelling a surge in oil prices. Oil had climbed to a peak of $120 a barrel briefly after the conflict escalated.

Read more

This has resulted in a hike in prices of gasoline and imported goods in the US. The aggressive tariff regime has also added to the woes of the hapless US consumer.

The Federal Reserve has been holding its benchmark interest rate steady. The Wall Street expects the Fed to raise the rate at least once this year to help fight inflation. The Fed, which aims to keep inflation near 2%, will have to take a cue from inflation data to determine if a rate hike is necessary.

US equities have been witnessing a bumpy ride on uncertainties surrounding the likely trajectory of interest rates.

The financial markets have been swayed by the prospects of a potential rate increase at the Fed's next meeting on September 15 to 16.

The rate hike expectations also got a boost after a speech late last month from Fed Chairman Kevin Warsh, Reuters reported.

Warsh hinted that the Fed may have to step up the gas if inflation ​remains high. A strong labor market report has added to the possibility, but still Wall Street is not certain about the trajectory of the interest rates.

Investors remain cautious as a tighter monetary policy could probably drag equities.