JPMorgan: July CPI Could Trigger Significant S&P 500 Swings
Claire Weston
JPMorgan's trading desk warns that Wednesday's U.S. July CPI release could drive a significant move in the S&P 500, with the market pricing a Fed September hike at roughly coin-flip odds.
What data is the market waiting for?
Economists surveyed by Dow Jones expect headline July CPI at +0.1% m/m and 3.4% y/y; core CPI — stripping out food and energy — at +0.2% m/m and 2.5% y/y.
The real focus is core inflation: whether it stays sticky or shows a fresh round of disinflation.
This means → headline CPI is the backdrop; the core m/m print is the single number that sets the market's direction.
How does JPMorgan map out the S&P 500 scenarios?
Most likely scenario (40% probability): core CPI lands at 0.2%–0.25% m/m, slightly above consensus — S&P 500 rises a mild 0.25%–0.75%.
Cooler outcomes (25%): core at 0.15%–0.2%, S&P 500 up 0.5%–1%; below 0.15% (5% odds), gains reach 1%–2%.
Hotter outcomes (25%): core at 0.25%–0.3%, S&P 500 drops 0.5%–1.25%; above 0.3% (5% odds), losses widen to 1.5%–2.5%.
Where do rate-hike odds stand right now?
The CME FedWatch tool puts the probability of a Fed September hike at roughly 52% — essentially a coin flip.
JPMorgan says the U.S. "dodged a bullet" on Middle East conflict driving an inflation spike, but this CPI print is a critical checkpoint.
In plain terms = if the data runs hot, markets will quickly reprice September from "coin flip" to "near certainty" — and that repricing is the S&P 500's main downside risk.
Content is for reference only, not financial advice.