Investors Questioned Cooler U.S. Inflation Report, Benchmark Indexes Under Pressure

Barry Adams
19 Dec, 2025
New York City

 

Stocks on Wall Street lacked momentum, and investors debated the accuracy of the latest inflation update. 

The S&P 500 index decreased 0.1%, and the tech-heavy Nasdaq Composite decreased 0.2% amid growing skepticism about the latest consumer price inflation report. 

Benchmark indexes headed higher on Thursday after November's inflation weakened to 2.7% and the core rate held at 2.6%. 

However, investors worried that the methodology used to calculate the cost of shelter may understate the overall inflation by a significant margin. 

The U.S. Bureau of Labor Statistics estimated the owner's equivalent inflation rate at zero, because the 43-day government shutdown prevented the federal agency from collecting key economic data. 

The shelter cost is likely to be sharply revised in December's inflation report, which could reaccelerate overall inflation to above 3.2%, higher than the Fed's target rate. 

Moreover, the federal government shutdown also prompted retailers to launch holiday sales earlier than usual, contributing to a downward pressure on the index. 

In international news, major central banks announced their rate decision on Thursday and Friday. 

The Bank of Japan increased its short-term rate by 25 basis points to 0.75%, increasing rates to a 30-year high, as policymakers race to normalize policy after a decade of an ultra-loose stance. 

On Thursday, the European Central Bank and the Bank of England announced their rate decisions, matching market expectations. 

The ECB held steady its reference rate at 2% and lifted its GDP growth outlook as inflation hovered near the 2% target rate. 

The Bank of England trimmed its policy rate by 25 basis points to 3.75% and signaled that, despite the weakening inflationary forces, future rate cuts are not assured in February and March 2026. 

 

U.S. Movers 

Nike Inc. dropped 10.5% to $58.75 despite the athletic shoemaker's quarterly results surpassing market expectations, but sales weakness in China and U.S. tariff-driven hits to overall margins pressured the stock. 

FedEx Corp. decreased 2.2% to $281.0, and the parcel delivery company's fiscal second-quarter results topped market expectations.