Trading CPI: How the stock market could react to Wednesday's inflation report

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A hotter print could drive down prices after a long advance. A cooler one could spur a rally, and lift expectations of a June rate cut.

The latest U.S. inflation data set for release Wednesday could spark a major move in stocks as investors deliberate how the Federal Reserve will proceed with interest rates, according to JPMorgan. The March consumer price index, due out Wednesday at 8:30 a.m. ET, is estimated to show an increase of 0.3% on a monthly basis and 3.4% year over year, according to economists polled by Dow Jones. Core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% and 3.7%, respectively.

40%, inclusive — An in-line to slightly hotter core reading could result in wide-ranging outcomes, depending on how well markets absorb the report. JPMorgan anticipates the S & P 500 could either advance a quarter percentage point, or lose as much as 1%. 37.5% chance of a print between 0.20% and 0.30%, inclusive — An in-line reading could mean the S & P 500 might add as much as a half percentage point, or fall by as much as 1%.

 

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