Market Reactions to US PPI Report

Author: Elior Manier

Date: 27 February 2026

Summary

The latest Producer Price Index (PPI) report from the US has shown a significant increase, with the headline figure coming in at 2.9% compared to the expected 2.6%. The Core PPI, which excludes food and energy, also exceeded expectations at 3.6% versus 3%. This marks the second consecutive month where the PPI has outperformed forecasts, raising concerns about persistent inflation.

Market Implications

The report has reignited inflationary fears among investors, suggesting that the progress in controlling inflation may not be as straightforward as previously hoped. The implications of tariffs, particularly with recent Supreme Court rulings affecting IEEPA tariffs, could further complicate the inflation landscape in upcoming Consumer Price Index (CPI) reports.

Market Reactions

In response to the PPI data, the following market movements were observed:

• US Treasuries: Yields have decreased as investors flock to bonds, indicating a risk-off sentiment in the market.
• US Equities: The S&P 500 is expected to open lower, reflecting the cautious mood as month-end trading and geopolitical risks loom.
• Gold: Prices have surged above $5,200, with potential for further increases if market conditions worsen.
• Cryptocurrencies: A downward trend is noted, with significant declines across major crypto assets.

Geopolitical Concerns

In addition to the economic data, geopolitical tensions, particularly regarding US relations with Iran and security measures in Israel, are contributing to market volatility. The US has advised its citizens and staff in Israel to evacuate, which is heightening market anxiety.

Conclusion

As the market navigates through these turbulent waters, investors are advised to stay alert to ongoing developments, particularly in the context of inflation data and geopolitical events. The current environment suggests a cautious approach as volatility is expected to persist.

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