According to reports, Wall Street analysts expect the consumer price index (CPI) data to be released this Thursday to show a rebound in inflation. However, since the state of the labor market remains a key factor driving market trends, analysts do not anticipate significant fluctuations in the stock market.

According to the head of U.S. stock trading strategy at Citigroup, options traders expect the volatility of the S&P 500 index to remain at a moderate level of around 0.7% after the CPI is released. This expectation is not only lower than the average actual volatility on CPI release days over the past year, but also lower than the expected volatility before the next employment report is released.

Currently, the market's expectations regarding the Federal Reserve's future interest rate policy are closely related to employment data. The latest employment data shows signs that economic growth may face challenges, which has led the market to anticipate that the Federal Reserve may cut interest rates by 25 basis points at the end of the September meeting, and may continue to take further rate cuts in the subsequent meetings in October and December.

Wall Street is closely monitoring the Federal Reserve's decision-making approach. The current market is already prepared for a rate cut of more than 1 percentage point over the next year. However, if inflation rises, it may impact this anticipated path.

The global market intelligence chief of JPMorgan pointed out in the latest report that, although they believe the CPI data is unlikely to force the Federal Reserve to pause rate cuts in September, if the data significantly leans hawkish, it may affect the Federal Reserve's decision-making considerations for the meetings in October and December.

Despite the importance of inflation data, the current state of the job market remains the dominant factor influencing Federal Reserve policy and market direction. Investors and analysts will continue to closely monitor employment data and statements from Federal Reserve officials to better predict the future direction of economic policy.