Core PCE: underlying inflation on trial

This is a key read on underlying price pressure, and it lands while the market is still uneasy about the next step for rates. Stocks are moving without a clear trend, so a small surprise here could matter more than usual.

• If core inflation comes in hotter than 0.3%, the market is likely to push rate-cut hopes further out. That would tend to lift yields and keep pressure on rate-sensitive shares.

• If it comes in cooler, traders usually read that as a cleaner path to easier policy later. That can help long-duration growth names and other parts of the market that like lower yields.

• If it lands around 0.3%, the first reaction may be modest, but the detail still matters. In a mixed, sideways tape, a clean in-line print may leave investors waiting for the next clue rather than making a big move.

Banks and insurers move with rate expectations, because those expectations change how the market values future income. If inflation runs hot, the pressure on this group usually rises first; if it cools, relief can show up quickly.