Goldman Sachs and JP Morgan both warned that if the December CPI in the United States falls below expectations, the US stock market will be volatile.

Wall Street giants Goldman Sachs and J.P. Morgan expect that if the U.S. December CPI data released on Wednesday is disappointing, the U.S. stock market will have another volatile day. The market currently expects that the year-on-year growth rate of U.S. December CPI will increase from the previous 2.7% to 2.9%, while the month-on-month growth rate will remain at 0.3%; the core CPI inflation, excluding volatile factors such as energy and food, is expected to maintain a year-on-year growth of 3.3% and a month-on-month growth of 0.2%. Goldman Sachs predicts that if the month-on-month growth rate of U.S. December core CPI is greater than 0.4%, the S&P 500 index will fall by 2%. J.P. Morgan predicts that if the month-on-month growth rate of U.S. December core CPI is greater than 0.3%, the S&P 500 index will fall by 1%-2%. At the same time, both Goldman Sachs and J.P. Morgan predict that if the month-on-month growth rate of U.S. December core CPI is relatively weak, it could trigger a 1%-2% rebound in the S&P 500 index. A series of robust economic data previously led to a slight cooling of market expectations for a Fed rate cut, causing the S&P 500 index to fall by 0.7% so far this year, while also causing an increase in U.S. bond yields and exacerbating volatility in U.S. stocks. Goldman Sachs strategist Dom Wilson said, "The U.S. stock market may now need a clear easing of the hawkish stance of the Fed to continue to rise." "We believe that the stock market may be more fragile before we reverse our view that Fed put options are declining." J.P. Morgan's market intelligence team pointed out that Wednesday's inflation data is a "key data point," as the volatility index VIX based on S&P 500 index options is at its highest level since last October's CPI release. The team stated, "Mild inflation data may reignite a stock market rebound, while strong earnings season may boost the rebound." However, the team added, "Strong inflation data may lead to a rise in the 10-year Treasury yield to 5%, increase volatility across all asset classes, and continue to put pressure on the stock market."