"Traders Brace for Market Volatility Amid Hot Inflation Data Release"
Traders in the US equity options market are on edge ahead of the release of inflation data, with options on the S&P 500-tracking SPDR S&P 500 Trust ETF indicating a potential 1% swing in either direction. Stronger-than-expected consumer price and employment data have reduced expectations for Fed interest rate cuts, leading to increased nervousness in the options market. Investors are now pricing in 94 basis points of rate cuts this year, compared to around 150 basis points in early January, while a Reuters survey of economists forecasts a 0.4% increase in the CPI for February.