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. The report could spark volatility in stocks ahead of the big Fed interest rate announcement. Against this backdrop, traders at JPMorgan broke down how they expect the market to react to the latest CPI data. .SPX YTD mountain SPX year to date Here’s what they expect, based on six scenarios: 40% chance: CPI rises 0.3%-0.35%: This is the most likely outcome, according to JPMorgan. Under this scenario, the S & P 500 could fall as much as 0.75% and gain as much as 0.75%. “This scenario has the widest range of outcomes since the low end of the range supports the disinflationary trend and the higher end of the range the stickier inflation argument” they wrote. 25% chance: CPI increases 0.25%-0.3%: 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 1.75% as September rate cut expectations surge, JPMorgan traders said. 5% chance: CPI rises more than 0.4% month over month: An increase in core goods and services inflation would drive this outcome, which would spark a 1.5%-2.5% sell-off in the S & P 500. “Given the acceleration higher in inflation, rate cut bets for 2024 would evaporate and we will see the return of views of a rate hike.” 2.5% chance: CPI rises less than 0.2%: The S & P 500 would rally 1.75%-2.5% as the smaller-than-expected increase would likely be “fueled by a material decline in shelter inflation.” To be sure, the Fed announcement could swing the market in the opposite direction to CPI if investors grow hopeful that rate cuts will in fact take place later this year.