US wholesale inventories rose by 0.2% in December. This matched the forecast.
The data refers to inventories held by US wholesalers. It describes the change from the previous month.
Wholesale Inventories Match Expectations
No other figures were provided in the update. No further details on sectors or categories were included.
The December wholesale inventories data, coming in exactly as expected with a 0.2% increase, removes a potential source of market surprise. This reinforces the idea of a stable but not accelerating economy as we move into the first quarter of 2026. For us, this suggests that implied volatility on major indices may be slightly too high, favoring strategies that benefit from range-bound price action.
This steady data point gives the Federal Reserve little reason to change its current data-dependent stance, especially with the latest January CPI report showing inflation moderating to 2.8%. The market should not expect any sudden moves on interest rates, making trades based on a continued, gradual decline in rate volatility attractive. This supports positioning for a calm market in the coming weeks.
We are seeing this inventory stability align with January’s slightly weaker-than-expected retail sales figures. This combination points to a consumer who is still spending but is becoming more cautious, capping the upside potential for corporate earnings in the near term. This makes buying aggressive, out-of-the-money call options on broad market ETFs a lower probability trade right now.
Volatility Strategies In A Stable Backdrop
Looking back, we can contrast this with the large inventory builds we saw in late 2024, which preceded the economic softening through the first half of 2025. The current modest and predictable increase indicates that businesses are managing their supply chains far more effectively. This reduces the tail risk of a sudden economic contraction, making long-dated protective puts less urgent.
Given this backdrop of predictability and the VIX index currently hovering around 17, strategies that profit from time decay and low volatility appear well-suited for the immediate future. We see opportunities in selling premium on sector ETFs that lack a clear, near-term catalyst for a major breakout. This is about positioning for continued stability rather than a directional move.
