A big inflation report is due Friday. How to trade the upcoming CPI report
The March CPI report is the final piece of economic data in a week that featured a ceasefire in the Iran war , a PCE report that was inline with expectations but showed inflation remains sticky and a second GDP reading was below estimates. The economy and the market appear to be at a precipice, giving Friday’s consumer price index report even greater importance, according to Art Hogan, chief market strategist at B. Riley Wealth. “The two things to contemplate include that the data predate the recent rise in energy prices, and the Core PCE at 3% remains well above the Fed’s 2% target,” Hogan wrote to clients. “Two things can be true at the same time: this was a constructive inflation report but will do nothing to alter the path of monetary policy. We will likely get a more current look at the inflation with the release on the March CPI tomorrow.” Below is a look at how several investors and strategists are positioning ahead of the critical CPI reading, as well as which trades they think will benefit the most. Trading the trends Eric Freedman, CIO of Northern Trust, sees opportunities in the energy sector and the theme of “real assets” with so much volatility in the market and the potential for sticky inflation. “Real assets remain a strategic focus for us, we just think inflation is going to be with us for some time,” said Freedman. “Real estate, infrastructure as well as the transport of hydrocarbons (oil, natural gas, coal) we think that is a durable theme that will last for some time.” Energy has been on fire this year as the Iran war drives oil prices higher. The S & P 500 energy sector has popped around 30% in 2026. Industrials have also outperformed, up more than 11%. XLE XLI,.SPX YTD mountain XLE and XLI vs SPX in 2026 Ken Johnson, CIO of InvestorBloc, is advising clients to prepare for sticky inflation ahead of the report. “We are still very highly concerned about what inflation is going to look like in the next four-to-six months. We’re still recommending hold on to energy stocks and commodities. We also like gold as a hedge against some of the geopolitical uncertainty we are seeing.” The tech trade Tech-focused investors are likely in “wait-and-see” mode ahead of the CPI report due to the implications for the Federal Reserve and rate cuts, said Wedbush analyst Dan Ives. “Unless you get screeching hot numbers on CPI, most investors will be able to shrug it off. Ultimately, you want to see [Federal Reserve rate] cuts, because debt is going to be more a part of the story given the build out of data centers,” said Ives. “Lower rates also accelerates the opportunity for M & A in software and a lot of other areas.” Still, Ives sees a big buying opportunity in cybersecurity. “Cybersecurity is the most disconnected subsector of tech,” said Ives. “The worry is that AI is going to disintermediate it. … These stocks are selling off like they are structurally broken, where in fact the budgets are going to increase significantly with AI.” Indeed, the Amplify Cybersecurity ETF (HACK) is down 7% this year, while the S & P 500 tech sector has lost just 1.8%. ZScaler, Qualys and Rubrik are HACK’s biggest losers in 2026, falling around 40% each. InvestorBloc’s Johnson is also eyeing potential opportunities in certain subsectors of tech. “High-quality AI stocks that are related to infrastructure, related to the cooling of data centers, data center development. We still like stocks that are really fulfilling that ability to run data centers,” he said. Johnson said Vertiv is an example of the type of infrastructure company that he sees as a long-term winner in the AI buildout. Shares have soared more than 78% this year. Preparing for more volatility Kevin Simpson of Capital Wealth Planning is advising clients to focus on income with so many questions around this CPI report and the path of inflation. “Friday’s CPI report is shaping up to be one of those moments where expectations matter more than the actual number,” said Simpson. “I think it makes sense to stay balanced and focus on quality companies with strong free cash flow, pricing power and the ability to navigate an uncertain macro backdrop.” Simpson recommends his own Amplify CWP Enhanced Dividend Income ETF (DIVO) to ride out potential volatility. “It gives you exposure to high-quality dividend paying companies but also adds an options overlay to generate income and cushion volatility,” he said. Freedman of Northern Trust also advised clients to put money to work with income in mind. “We’d be looking to deploy some cash across both global equities as well as in core fixed income. There is a good chance both outperform cash in the intermediate term but maybe not the very very short term.”