As the market eagerly awaits the next CPI report, the overarching question remains: Is the U.S. economy on track to hit the Fed's 2% inflation target, or are we grappling with more tenacious inflationary trends?

The July Curveball and What's In Store For August: Despite a year-long trend of dropping annual inflation rates, July threw us a curve with a jump from 3% to 3.2% - slightly under the anticipated 3.3%.

Expectations point to headline inflation increasing to 3.6% YoY. On a monthly basis, the CPI is projected to advance by 0.6%, marking an acceleration from the 0.2% uptick in July. The factor to blame? Just look at oil prices.

But here's the twist - core inflation, often a truer tell of the underlying inflationary pressures, might dial down from 4.7% to 4.3%.

Market Speculations: Mixed inflation signals have investors buzzing about possible market movements post the August CPI release, which is set to occur on Sept. 13 at 8:30 a.m. ET.

Here's a recap of how five major ETFs moved following prior CPI announcements.

1. SPDR S&P 500 ETF Trust (SPY  )

  • Aug. 10, 2023: On the day July's CPI data came out, SPY barely blinked, staying flat. However, the following week was less serene, with the ETF sliding down by 2%.
  • July 12, 2023: June's CPI report seemed to spark some optimism. The SPY appreciated 0.8% on the back of the lower-than-anticipated figures, then maintained its momentum, climbing another 2% over the ensuing week.
  • June 13, 2023: Once again, a softer inflation report led to a boost in investor confidence. SPY went up by 0.7% on the release day, and broadly maintained that level in the subsequent week.
2. iShares Core U.S. Aggregate Bond ETF (AGG  )

  • Aug. 10, 2023: AGG fell 0.7% on the day and slid another 1% the following week after July's CPI release.
  • July 12, 2023: Following June's CPI, AGG gained 0.8% immediately and added another 0.8% over the week.
  • June 13, 2023: Post-May's CPI data, AGG dipped 0.5% but rebounded with a 0.8% rise in the subsequent week.
3. SPDR Gold Trust (GLD  )

  • Aug. 10, 2023: GLD dipped 0.1% on release day and went down another 1.3% over the week post-July's CPI.
  • July 12, 2023: After June's CPI, GLD surged 1.4% on the day and then added 0.5% in the week.
  • June 13, 2023: Post-May CPI, GLD dropped 0.7% and declined another 0.4% during the week.
4. iShares Russell 2000 ETF (IWM  )

  • Aug. 10, 2023: Small-cap stocks tracked by the IWM ETF fell 0.4% on release day and went down another 3.7% over the week post-July's CPI.
  • July 12, 2023: After June's CPI, IWM rose 1.1% on the day and then added 2.6% in the week.
  • June 13, 2023: Post-May CPI, IWM saw a solid 1.1% rise and then declined 1.4% through the week.
5. iShares 20+ Treasury Bond ETF (TLT  )

  • Aug. 10, 2023: TLT took a hit of 1.7% on the day following July's CPI and deepened its decline by 2.3% over the subsequent week.
  • July 12, 2023: In response to June's CPI, TLT surged 1.1% and continued its ascent, marking a 2% rise throughout the week.
  • June 13, 2023: Post-May's CPI figures, TLT saw a 1% drop but rebounded with a notable 2.1% gain in the week that followed.