That May CPI print just dropped and it’s the hottest annual reading in over three years, clearing the street’s expectations by a decent margin. S&P futures went from flat to down 0.5-0.6% inside a minute, sitting around 7,353 as tech got hit first.

Volatility jumped right away. Traders are already flipping the script on how many rate cuts (or hikes) are left on the table for the rest of the year. The knee-jerk move feels like a classic “higher for longer” repricing, but the question is whether this sticks or gets walked back once the next couple of data points roll in.

What stands out is how fast the narrative shifted. A few minutes earlier the market was still pricing a fairly dovish path; now the same desks are talking about whether the June and July meetings just became a lot more complicated. The futures reaction is modest in size but the speed tells you positioning was leaning the other way.

Key things I’m watching into the close:

• Whether the 7,350 area holds or we see another quick 20-30 handle drop if volume picks up.
• How rate-sensitive names (regional banks, REITs, utilities) trade relative to the broader index.
• Any follow-through in the VIX – if it stays above 18-19 the options market is clearly expecting more noise tomorrow.

Anyone else seeing the same shift in rate-hike probabilities on the screens, or are you treating this as a one-day headline that fades into the weekend?