Trading CPI: How stocks may react to latest inflation report, according to JPMorgan traders

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Investors will get the May consumer price index report, the latest look into the state of U.S. inflation, on Wednesday before the market opens.

The Federal Reserve policy announcement isn't the only major piece of news expected Wednesday. Investors will also get the May consumer price index report, the latest look into the state of U.S. inflation. Economists polled by Dow Jones expect CPI to have risen 0.1% month over month and 3.4% year on year. Core CPI, which removes volatile food and energy prices, is forecast to have increased 0.3% from the prior month and 3.5% year over year.

3%: The S & P 500 would gain 0.75%-1.25% under this outcome as it would "likely restart the Goldilocks narrative." 15% chance: CPI grows by 0.35%-0.4%: Lackluster disinflation in core goods and shelter would lead to this outcome, decreasing the chances of a rate cut this year. The S & P 500 would pull back between 1% and 1.25% under this scenario. 12.5% chance: CPI rises between 0.2% and 0.25%: The S & P 500 would jump 1.25% to 1.

 

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