Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
S&P 500 Holds Losses Despite Pullback in Short-Term Consumer Inflation Expectations

S&P 500 Holds Losses Despite Pullback in Short-Term Consumer Inflation Expectations

Diego Colman, Contributing Strategist
What's on this page


  • April U.S. consumer inflation expectations at a one-year horizon falls to 6.3% from 6.6% in March
  • In contrast, longer term inflation expectations (36-months) edge up to 3.9% from 3.7%
  • U.S. stocks hold losses as investors remain focused on the April CPI print expected to be released Wednesday

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Most Read: S&P 500 and FTSE 100 Forecasts for the Week Ahead

U.S. consumers’ short-term inflation expectations retreated last month, but remained near record levels according to a report released Monday by the Federal Reserve of New York. For reference, the survey results are not an official projection by the U.S. central bank, but one of several data sets that are closely tracked to follow developments in the economy.

Digging into the numbers, the monthly survey showed that one-year inflation expectations fell to 6.3% from their all-time high of 6.6% set in March, a modest pullback but a welcome step in the right direction. At the three-year horizon, Americans anticipate CPI to rise 3.9%, up modestly from 3.7% one month ago.

It is too soon to make general assumptions about these results, however, if consumers believe that inflation will come down in the near-term, they will not likely demand higher and higher pay on a pervasive basis, reducing employment costs for businesses and the risk of a “wage-price spiral”. These dynamics may eventually help bring down inflation, but the process will not play out overnight.

On the labor market front, the proportion of survey participants who expect the unemployment rate to be higher 12 months from now increased by 0.1 percentage point to 36.3%, a negligible change but the highest reading since February. Looking ahead, this metric needs to be watched closely because if consumers believe that hiring conditions will deteriorate, they may begin to curtail discretionary spending. This could become a problem for the economy, considering that consumption accounts for roughly two-thirds of the country's GDP.

Equities Forecast
Equities Forecast
Recommended by Diego Colman
Get Your Free Equities Forecast
Get My Guide


This morning's New York Fed survey results did not elicit any significant market reaction, as investors remain concerned about growing headwinds for the U.S. economy, including rising rates, soft corporate earnings growth, supply chain bottlenecks and the increasing likelihood of recession. For these reasons, U.S. stocks sustained sharp losses after the survey crossed the wires, with the S&P 500 down roughly 2.5% and Nasdaq 100 plummeting about 3% on the day.

Looking ahead, there is no relevant economic data on Tuesday, but on Wednesday, there is a high-impact event on the calendar: the U.S. April CPI report. If inflationary forces ease more than expected, a relief rally could be in the cards, but if price pressures don't cool significantly and top out, we can’t rule out more pain for stocks in the near term.



S&P 500 Chart Created Using TradingView


  • Are you just getting started? Download the beginners’ guide for FX traders
  • Would you like to know more about your trading personality? Take the DailyFX quiz and find out
  • IG's client positioning data provides valuable information on market sentiment. Get your free guide on how to use this powerful trading indicator here.

---Written by Diego Colman, Market Strategist

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.