Markets brace for inflation volatility

Traders are positioning themselves for the S&P 500 to move 1.2 percent either way after Wednesday’s inflation data, according to Citigroup. That pricing parallels the pricing for Aug. 29, the day after Fed Chair Jerome Powell’s Jackson Hole speech and NVidia’s earnings report. Rocky Fishman, founder of derivatives analysis firm Asym 500, said the options market has yet to send a clear signal for stocks. “When volatility is high, it’s historically a good time to buy stocks. But that’s happened to some degree. So the CPI data will be a significant catalyst,” Fishman said. The S&P 500 had risen 3 percent from its weekly low after Monday’s turmoil. But over the next 30 days, the number of contracts protecting against a 10% decline in the SPDR S&P 500 ETF Trust rose to the highest level since October, double that protecting against a 10% rally. The U.S. CPI is expected to remain at its 3% annualized level in July, as seen in June.