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.

Wall Street will be looking for clues from key inflation updates this week.

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

A day later, the US Consumer Price Index (CPI) for August will be released. The closely watched indicator tracks price changes for specific grocery items, furniture and clothing, as well as shifts in the cost of services ranging from car maintenance to travel and restaurant dining.

The reports will give Wall Street and the Federal Reserve a clearer indication of the trajectory of inflation in the US. Inflation has remained above 3%, fuelling concerns among businesses and households. The pace of price growth has also left wage growth far behind, adding to the economic strain on households.

Rising energy prices linked to the conflict in the Middle East have fuelled inflation concerns worldwide, mainly because of the closure of the Strait of Hormuz. Before the conflict, a fifth of the world's energy cargoes passed through the contentious waterway. Iran has now virtually shut the strait, while the US has imposed a naval blockade on Iran, further driving up oil prices. Oil briefly climbed to a peak of US$120 a barrel after the conflict escalated.

This has pushed up gasoline and imported goods prices in the US. The aggressive tariff regime has added to the woes of American consumers.

The Federal Reserve has kept its benchmark interest rate unchanged. Wall Street expects the Fed to raise rates at least once this year to help combat inflation. The Fed, which aims to keep inflation near 2%, will look to the latest data to determine whether a rate hike is necessary.

US equities have endured a bumpy ride amid uncertainty over the likely direction of interest rates.

Financial markets have been swayed by the prospect of a potential rate increase at the Fed's next meeting, scheduled for Sept 15-16.

Expectations of a rate hike also received a boost after a speech late last month by Fed chairman Kevin Warsh, Reuters reported.

Warsh hinted that the Fed may have to step up its efforts if inflation remains high. A strong labour market report has added to the possibility, but Wall Street remains uncertain about the direction of interest rates.

Investors remain cautious as tighter monetary policy could weigh on equities.

Originally published on IBTimes