Here's how much stocks could tumble if consumer inflation comes in hot

Core Viewpoint - The stock market is facing a critical test with upcoming consumer inflation data, which could significantly impact equity prices, particularly the S&P 500 [1][5]. Group 1: Market Sentiment and Predictions - Investors have largely ignored negative news from the US job market, but upcoming inflation data may challenge this optimism [1][3]. - If inflation figures exceed expectations, the S&P 500 could decline by as much as 8%, potentially falling to a range of 6,000-6,200 in a downside scenario [2][7]. - Current market conditions reflect a "Goldilocks scenario," where investors anticipate favorable economic conditions that would allow for Federal Reserve rate cuts without triggering a recession [3][4]. Group 2: Economic Indicators and Expectations - The market is preparing for the August Consumer Price Index (CPI) report, with expectations of a 0.3% monthly increase and a 2.9% year-over-year rise, slightly lower than July's 3.1% [5]. - Producer prices for August showed a 0.1% decrease, but JPMorgan economists predict an overall rise in inflation in the coming months, which historically poses challenges for equities [6]. - Rising inflation is typically a negative environment for equities, with historical data showing the S&P 500's average increase of 2% during rising inflation compared to a 12% increase during periods of cooling inflation [6].