Buy SPX if Producer Price Index stays cool

The May 2026 Consumer Price Index (CPI) report delivered exactly what the market expected—and this is part of the problem. Headline annual inflation accelerated to 4.2%, hitting a three‑year high. What was the main culprit behind the spike? Soaring energy prices, which leapt 3.9% month‑on‑month as the conflict with Iran escalated. Yet, beneath the surface, a quieter story emerged: the core CPI printed at 0.2%, slightly below the 0.3% forecast. The result is a market torn between two realities: the nightmare of expensive crude and the fragile hope that inflation is finally cooling down.

How did Wall Street react to this mixed picture? Yesterday's session ended in the red for SPX, as investors digested geopolitical risks and a fresh batch of hawkish chatter from the Federal Reserve. Today, the spotlight turns to the Producer Price Index (PPI). 

If this data confirms the softer tone set by the core CPI, stocks may attempt a technical rebound. But don't get too comfortable. The energy sector is still a heavy weight on investors' shoulders, and the June 16-17 Fed meeting looms like a storm cloud—both forces ready to choke off any sustained rally.

Then comes Friday, and it could be a market‑moving spectacle. The highly anticipated $1.75 trillion SpaceX IPO is about to take center stage. This mega-event may drain liquidity from the rest of the tape, but it also has the potential to ignite a fire under tech stocks and send risk appetite into overdrive.

A smooth debut for SpaceX could trigger growth in equities, helping the S&P 500 Index end the week strong and recoup at least some of Wednesday's losses. But here's the catch: "Triple Witching" options expiration is also on the calendar, promising to boost volatility.

Let's cut to the chase. The most likely scenario for SPX is a return to $7,500, provided that tensions in the Middle East don't boil over again. Either way, buckle up for wild price swings over the next two days.

What does all of this mean for the Fed? The CPI report wasn't a "black swan" event; it matched forecasts almost perfectly. However, it locked in expectations that the American regulator will keep interest rates uncomfortably high. The real fight is now centered on $7,225, the local low. If this floor holds, expect the market to rebound by the weekend, riding the wave of SpaceX hype.

For those willing to embrace the optimistic scenario, go long on the S&P 500 Index with a tight leash at $7,200.

The ultimate recommendation is to buy SPX. Place Take Profit at $7,500. Set Stop Loss at $7,200.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.