S&P 500 tests resistance ahead of crucial PPI data release

S&P 500 futures hover near 5,850 resistance as markets await Wednesday's Producer Price Index data, which could significantly impact Federal Reserve rate expectations and dollar strength. The index has consolidated in a tight 30-point range over the past three sessions, reflecting uncertainty about inflation trajectory. EUR/USD trades steady at 1.0795, showing resilience despite dollar strength elsewhere. WTI crude oil futures declined 1.2% to $78.30, weighing on commodity currencies. Market positioning suggests heightened sensitivity to inflation surprises, with a higher-than-expected PPI potentially triggering risk-off flows benefiting the dollar. Options data indicates significant hedging activity around the 5,800 support level. A PPI reading above the 0.3% consensus could strengthen the dollar and pressure equities, while a softer print might fuel risk-on sentiment and weaken the greenback against major pairs.