Jakarta. Indonesian stocks edged lower on Monday as renewed expectations of a Federal Reserve rate hike and concerns over inflation weighed on market sentiment.

The Jakarta Composite Index (JCI) fell 7 points, or 0.11%, to 6,533. The index moved between 6,523 and 6,537 during the session.

Trading volume reached 798 million shares, with turnover of Rp 455.78 billion ($25.85 million) across more than 74,000 transactions. A total of 219 stocks rose, 242 declined and 235 were unchanged.

Phintraco Sekuritas said Wall Street indexes rebounded on Friday as oil prices declined. However, yields on short-term US government bonds rose following the latest inflation data, reinforcing expectations of a Fed rate hike.

“On a weekly basis, all three major indexes closed in negative territory, pressured by continued selling in the bond market, rising speculation of a rate hike, and higher oil prices,” Phintraco Sekuritas wrote in its research report on Monday.

US consumer price index (CPI) inflation stood at 3.4% year-on-year in August 2026, unchanged from the previous month and in line with expectations. Core inflation eased to 2.4% from 2.5% year-on-year.

However, monthly CPI inflation accelerated to 0.4% from 0.1%, while monthly core inflation rose to 0.3% from 0.2%. The University of Michigan’s consumer sentiment index also fell to 47.8 in September from 51.7.

Gold prices, meanwhile, gained 1.1% to $4,363 per troy ounce despite still-elevated inflation data boosting expectations for a Fed rate hike, Phintraco said.

The brokerage added that the possibility of negotiations over tanker traffic between the Gulf Cooperation Council (GCC) countries and Iran had helped contain the rise in oil prices, easing some market concerns over the inflation outlook.

Pluang Research said this week could mark one of the most important turning points for global monetary policy this year, with three G7 central banks -- the Fed, Bank of England and Bank of Japan -- set to announce their interest-rate decisions on three consecutive days amid renewed inflation pressures across economies.

“Hotter-than-expected US core inflation data has led markets to view a Fed rate hike as almost certain, potentially running counter to President Trump’s wishes. Interestingly, the ECB had already moved late last week, signaling an increasingly synchronized hawkish stance across the G7,” Pluang said in its report on Monday.

For Fed Chair Kevin Warsh, the decision will be his first major test of credibility, Pluang said. Markets have already priced in a rate hike, meaning a failure to meet those expectations could trigger greater volatility than the hike itself.

According to CME FedWatch, the probability of a 25-basis-point Fed rate hike this week rose to nearly 87% following the release of the inflation data.

Domestically, Kiwoom Sekuritas Indonesia said the government still faces a major challenge in meeting its 2026 tax revenue target.

Tax revenue is estimated to have reached Rp 1,409.1 trillion through August, equivalent to only 59.8% of the target set in the 2026 State Budget, despite growing 24.1% year-on-year. This leaves around 40.2% of the annual target to be collected in the final four months of the year.

Kiwoom also said business expectations for Indonesia’s third-quarter 2026 macroeconomic conditions had deteriorated further. The Macroeconomic Conditions Expectations Index (IKM) fell to 28 from 37 in the previous quarter, moving deeper into pessimistic territory.

Businesses expect economic growth to moderate after seasonal factors such as Ramadan, Eid al-Fitr and the school holidays fade.

Additional pressure is expected from a weaker rupiah and higher inflation stemming from elevated global energy prices, adjustments to non-subsidized fuel prices, rupiah depreciation and the risk of El Niño pushing up food prices.

“This condition raises the potential for a pre-emptive BI-Rate hike to maintain rupiah stability and inflation expectations, while manufacturing activity has entered contraction territory, with the PMI falling to 49 in August 2026,” Kiwoom said.

Across Asia, Tokyo’s Nikkei 225 fell 0.97% as of 9:25 a.m. Jakarta time. Seoul’s Kospi dropped 2.37% before trading was halted, while Hong Kong’s Hang Seng declined 0.28% and Shanghai’s SSE Composite fell 0.21%.

Wall Street, meanwhile, closed higher on Friday, snapping four consecutive sessions of declines as pressure from rising oil prices and Treasury yields began to ease. The S&P 500 gained 0.86%, the Nasdaq 100 rose 0.96%, and the Dow Jones Industrial Average advanced 0.98%.

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