Consumer Prices, Gasoline, Michigan Sentiment: 3 Things to Watch

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Consumer Prices, Gasoline, Michigan Sentiment: 3 Things to Watch
Credit: © Reuters.

By Liz Moyer

Investing.com -- Stocks accelerated a sell-off late Thursday ahead of tomorrow's much-anticipated data on consumer prices and just days before the Federal Reserve meets to decide its next move on interest rates and monetary tightening.

Investors are hoping Friday's consumer price index for May shows signs inflation has peaked and is coming down. 

The Fed's move come after Thursday's signal from the European Central Bank that it is prepared to raise rates next month by a quarter-point and make another similar or larger move in September. 

Hopes that inflation is waning could be dashed by persistently high gasoline prices, which are causing pain for American households as well as businesses. 

Fuel isn't the only expense for business that is still elevated. Stitch Fix (NASDAQ: SFIX ) became the latest to announce a plan to lay off salaried workers because of higher expenses for everything from its supply chain to marketing.

Here are three things that could affect markets tomorrow:

1. Consumer prices

The consumer price index data will be released at 8:30 AM ET. Analysts expect it to rise 0.7% for the month of May and 8.3% for the year ending in May. That compares to growth of 0.3% for the month of April and 8.3% for the year. The core CPI number, which excludes volatile food and fuel prices, is expected to rise 0.5% for the month and 5.9% for the year, compared to a gain of 0.6% in April and 6.2% for the year in the previous reading.

2. Gas prices

Not helping the inflation output is the price of gasoline , which topped $5 a gallon nationally as of Thursday, according to GasBuddy. In some large cities, it is well above that already. Analysts are watching to see if persistently high gasoline prices leads to a drop off in demand as the summer holiday season tries to get off the ground.

3. Michigan consumer sentiment

The June Michigan consumer sentiment reading comes out at 10:00 AM ET on Friday. Analysts expect a 58, down slightly from the previous reading of 58.4.

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