JPMorgan expects notable swings in stocks on Wednesday following the release of July’s consumer price index report. Headline CPI is forecast to rise 0.1% monthly, bringing the 12-month gain to 3.4%, while core CPI is expected to increase 0.2% from June and 2.5% year-over-year. These figures will be crucial for the Federal Reserve as it considers a potential rate hike at its September policy meeting, with futures pricing in a nearly 52% probability of a rate increase. Based on JPMorgan’s scenarios, the S&P 500 could decline between 1.5% and 2.5% if core monthly CPI exceeds 0.3%, or rise between 0.25% and 0.75% if it falls between 0.2% and 0.25%.
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