{"id":3458,"date":"2026-02-13T10:19:20","date_gmt":"2026-02-13T10:19:20","guid":{"rendered":"https:\/\/www.finznest.com\/blog\/cpi-preview-will-sticky-inflation-derail-fed-cuts-and-the-2026-stock-rally\/"},"modified":"2026-02-13T10:19:20","modified_gmt":"2026-02-13T10:19:20","slug":"cpi-preview-will-sticky-inflation-derail-fed-cuts-and-the-2026-stock-rally","status":"publish","type":"post","link":"https:\/\/www.finznest.com\/blog\/cpi-preview-will-sticky-inflation-derail-fed-cuts-and-the-2026-stock-rally\/","title":{"rendered":"CPI Preview: Will Sticky Inflation Derail Fed Cuts and the 2026 Stock Rally?"},"content":{"rendered":"<div>\n<ul type=\"disc\">\n<li>The closely watched US January CPI report comes out on Friday morning.<\/li>\n<li>Headline annual inflation and core CPI are both seen rising 2.5%.<\/li>\n<li>Here\u2019s what to watch and how markets could react.<\/li>\n<\/ul>\n<p>As markets gear up for the delayed release of the January Consumer Price Index () data on Friday, investors are bracing for insights into whether inflation is finally cooling or if persistent pressures will linger into the new year.<\/p>\n<p>The report, originally slated for earlier in the week but postponed due to the partial government shutdown, comes on the heels of a surprisingly strong January jobs report that added 130,000 nonfarm payrolls and ticked the down to 4.3%.<\/p>\n<p>This robust labor data has already tempered expectations for aggressive , shifting focus squarely to inflation metrics.<\/p>\n<p>A hotter-than-expected CPI print could reinforce the Fed\u2019s cautious stance, potentially pressuring the ongoing stock market rally, while a softer reading might reignite hopes for monetary easing and fuel further gains in equities.<\/p>\n<h2><strong>What to Expect<\/strong><\/h2>\n<p>Analysts predict a 0.3% month-over-month rise in , translating to a 2.5% year-over-year increase, down from December\u2019s 2.7% reading. This would mark the lowest annual rate since May 2025.<\/p>\n<p><em>Source: Investing.com<\/em><\/p>\n<p>, which strips out volatile food and energy prices, is also projected to climb 0.3% monthly, with the  easing slightly to 2.5% from 2.6%.<\/p>\n<p><span style=\"display: none;\">\u00a0<\/span><\/p>\n<p>The Cleveland Fed\u2019s inflation nowcast estimates January  at just 0.13% month-over-month and core at 0.22%, suggesting potential downside surprises.<\/p>\n<p>Traders are still betting that the next Fed rate cut would be in June, according to the Investing.com Fed Monitor tool. By that point, President Donald Trump\u2019s newly nominated Fed chair, Kevin Warsh, could be in charge.<img decoding=\"async\" title=\"Fed Monitor Tool\" src=\"https:\/\/d1-invdn-com.investing.com\/content\/pic8c9046b53515dafd6083c374b7fd6fd2.png\" alt=\"Fed Monitor Tool\" align=\"bottom\" border=\"0\"\/><\/p>\n<p><em>Source: Investing.com<\/em><\/p>\n<h2><strong>Market Implications<\/strong><\/h2>\n<p>Equities have held near their recent record highs, but the  remains vulnerable to CPI surprises. A hot report could spark a sell-off, particularly in rate-sensitive tech and growth stocks, as higher-for-longer rate expectations dent valuations.<img decoding=\"async\" title=\"S&amp;P 500 Price Chart\" src=\"https:\/\/d1-invdn-com.investing.com\/content\/picae83245c6ba44579e79cf866123b3b90.png\" alt=\"S&amp;P 500 Price Chart\" align=\"bottom\" border=\"0\"\/><\/p>\n<p><em>Source: Investing.com<\/em><\/p>\n<p><span style=\"display: none;\">\u00a0<\/span><\/p>\n<p>Safe-haven assets will also be in focus. , traditionally a refuge in times of inflationary uncertainty, could see prices climb back towards their recent record above $5,500 per ounce if the CPI report indicates persistent price pressures.<img decoding=\"async\" title=\"Gold Futures Price Chart\" src=\"https:\/\/d1-invdn-com.investing.com\/content\/pic8ff79dda2db1ee483c3677485abd934e.png\" alt=\"Gold Futures Price Chart\" align=\"bottom\" border=\"0\"\/><\/p>\n<p><em>Source: Investing.com<\/em><\/p>\n<p>Elsewhere, in the bond market, a strong inflation print could push the  towards 4.5% (vs. 4.1% pre-CPI). A mild CPI report might reverse this, dragging yields below 4.0% and reviving demand for rate-sensitive bonds.<\/p>\n<h2><strong>Bottom Line<\/strong><\/h2>\n<p>In short, Friday\u2019s January CPI release isn\u2019t just another data point; it\u2019s a key input into the Fed\u2019s rate\u2011cut calculus and a potential inflection point for risk assets. A cooperative number keeps the soft\u2011landing, gradual\u2011cut story intact. A hotter\u2011than\u2011expected print could reset those expectations quickly.<\/p>\n<p>***<\/p>\n<div style=\"border: 2px solid #ff7f00; background-color: #fff4e6; padding: 15px; border-radius: 8px; font-family: Arial, sans-serif; color: #1a1a1a;\">\n<h3 style=\"color: #ff7f00; margin-top: 0px; font-size: 22px; font-weight: bold; letter-spacing: 0.5px;\"><strong>Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:<\/strong><\/h3>\n<ul style=\"list-style-type: none;\">\n<li><strong>ProPicks AI<\/strong>: AI-managed stock picks every month, with several picks that have already taken off this month and in the long term.<\/li>\n<li><strong>Warren AI:<\/strong> Investing.com\u2019s AI tool provides real-time market insights, advanced chart analysis, and personalized trading data to help traders make quick, data-driven decisions.<\/li>\n<li><strong>Fair Value<\/strong>: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.<\/li>\n<li>\n<p><strong>1,200+ Financial Metrics at Your Fingertips: <\/strong>From debt ratios and profitability to analyst earnings revisions, you\u2019ll have everything professional investors use to analyze stocks in one clean dashboard.<\/p>\n<\/li>\n<li>\n<p><strong>Institutional-Grade News &amp; Market Insights: <\/strong>Stay ahead of market moves with exclusive headlines and data-driven analysis.<\/p>\n<\/li>\n<li>\n<p><strong>A Distraction-Free Research Experience: <\/strong>No pop-ups. No clutter. No ads. Just streamlined tools built for smart decision-making.<\/p>\n<\/li>\n<\/ul>\n<p><strong>Not a Pro member yet? <\/strong><\/p>\n<p><em>Already an InvestingPro user? Then jump straight to the list of picks here.<\/em><em><a href=\"https:\/\/www.investing.com\/pro\/propicks\/\" target=\"_blank\" rel=\"noopener\"><\/em><\/p>\n<\/div>\n<p><strong><em>Disclosure: <\/em><\/strong><strong><em>This is not financial advice. Always conduct your own research.<\/em><\/strong><\/p>\n<p><em>At the time of writing, I am long on the S&amp;P 500, and the Nasdaq 100 via the\u00a0SPDR\u00ae S&amp;P 500 ETF, and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies\u2019 financials.<\/em><\/p>\n<p><em>The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.<\/em><\/p>\n<p><em>Follow Jesse Cohen on X\/Twitter <\/em><a href=\"https:\/\/twitter.com\/JesseCohenInv\" rel=\"noopener nofollow\" target=\"_blank\"><em>@JesseCohenInv<\/em><\/a><em> for more stock market analysis and insight.<\/em><\/p>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><script id=\"fb_pixel\" data-nscript=\"beforeInteractive\">!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';n.queue=[];t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window, document,'script','https:\/\/connect.facebook.net\/en_US\/fbevents.js');<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The closely watched US January CPI report comes out on Friday morning. Headline annual inflation and core CPI are both seen rising 2.5%. Here\u2019s what to watch and how markets could react. As markets gear up for the delayed release of the January Consumer Price Index () data on Friday, investors are bracing for insights [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3459,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[609,658,2595,289,615,214,397,2594,229],"class_list":["post-3458","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cpi","tag-cuts","tag-derail","tag-fed","tag-inflation","tag-preview","tag-rally","tag-sticky","tag-stock"],"_links":{"self":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/3458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/comments?post=3458"}],"version-history":[{"count":0,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/posts\/3458\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media\/3459"}],"wp:attachment":[{"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/media?parent=3458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/categories?post=3458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.finznest.com\/blog\/wp-json\/wp\/v2\/tags?post=3458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}