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Subscribe →It was a very rocky trading session, with markets fluctuating significantly. As we head into the CPI report, one noticeable aspect was the VIX 1-day, which rose substantially today. It closed up roughly 5.6 points, ending at 22.50. This highlights the nervousness in the market ahead of tomorrow’s CPI report.
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The CPI is projected to rise from 0.3% to 0.4% month-over-month, with core CPI expected to hold steady at 0.3%. The CPI is anticipated to increase to 2.9% year over year from 2.7%, while core CPI is projected to remain unchanged at 3.3% year over year.
Looking back, there have only been two instances in the past year when the PPI report was released before the CPI report. Historically, the market has made minor adjustments based on this report. However, based on intraday swaps data, it doesn’t appear that the market has shifted its expectations for tomorrow’s CPI report. Swaps pricing remains around 2.9% year-on-year and suggests a month-over-month change of approximately 0.4%, which aligns with analyst expectations.
A 0.4% m/m number is unfavorable for the Fed and will probably cause the market to remove rate cuts for 2025 from its equation. Despite a cooler-than-expected PPI report, ten-year rates were flat at 4.80%, while thirty-year rates edged slightly higher to 4.98%. The dollar index weakened marginally. Obviously, a miss on the CPI would cause rates to drop sharply and the dollar index to decline, which would be a positive for the stock market.
With the 1-day VIX high, there is an opportunity for a volatility crush following the data’s release, which means the initial market reaction might not reflect the eventual trend. So, a post-CPI rally, regardless of the data, is likely. Otherwise, support in the S&P remains at 5,780, with resistance at 5,875.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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Mott Capital's Market Chronicles May 15, 2026 1:45 PM