Possible market turmoil due to CPI data release

There is a risk that the CPI data to be released this week will further intensify market fluctuations. There is a risk that the CPI data to be released this week will further intensify market fluctuations.

The US stock market experienced significant fluctuations last week, and the S&P 500 Index's Volatility Index (VIX) reached a high level since the 2020 pandemic. According to Citigroup's report, the S&P 500 index is expected to fluctuate at least 1.2% when the CPI is announced on Wednesday.

In the market,Core CPI rises 0.2% month-on-month and 3.2% year-over-yearThere is an expectation, but if the data significantly exceeds or falls short of expectations, predictions will be readjusted, and there is a possibility that new market turmoil will occur.

Evans May Wealth's Brooke May said, “If the Fed cuts interest rates drastically in response to economic deceleration, it is historically disadvantageous for stock returns. Increased volatility is expected, and a further decline in the stock market is possible.”

Also, the options market does not fully believe in the recovery of the S&P 500 index, and the cost of depreciation forecasting options has reached twice the expected rise. Rocky Fishman of Asym 500High volatility is an opportunity to buy stocks, and CPI is an important catalystIt says so.

Traders are watching closely how Federal Reserve Chairman Powell's remarks after the CPI data was released will affect their expectations of interest rate cuts. Thomas Urano of Sage Advisory points out that “while bad economic news is seen as a catalyst for policy changes, if data continues to deteriorate, it will have a major impact on the stock market.”