Image Source: PexelsIt was a very rocky trading session, with markets fluctuating significantly. As we head into the CPI report, one noticeable aspect was the VIX 1-day, which rose substantially today. It closed up roughly 5.6 points, ending at 22.50. This highlights the nervousness in the market ahead of tomorrow’s CPI report.The CPI is projected to rise from 0.3% to 0.4% month-over-month, with core CPI expected to hold steady at 0.3%. The CPI is anticipated to increase to 2.9% year over year from 2.7%, while core CPI is projected to remain unchanged at 3.3% year over year.Looking back, there have only been two instances in the past year when the PPI report was released before the CPI report. Historically, the market has made minor adjustments based on this report. However, based on intraday swaps data, it doesn’t appear that the market has shifted its expectations for tomorrow’s CPI report. Swaps pricing remains around 2.9% year-on-year and suggests a month-over-month change of approximately 0.4%, which aligns with analyst expectations.A 0.4% m/m number is unfavorable for the Fed and will probably cause the market to remove rate cuts for 2025 from its equation. Despite a cooler-than-expected PPI report, ten-year rates were flat at 4.80%, while thirty-year rates edged slightly higher to 4.98%. The dollar index weakened marginally. Obviously, a miss on the CPI would cause rates to drop sharply and the dollar index to decline, which would be a positive for the stock market.With the 1-day VIX high, there is an opportunity for a volatility crush following the data’s release, which means the initial market reaction might not reflect the eventual trend. So, a post-CPI rally, regardless of the data, is likely. Otherwise, support in the S&P remains at 5,780, with resistance at 5,875.More tomorrowMore By This Author:Treasury Rates Continue To Rise As Inflation Swaps Break Out A Hot CPI Report Threatens Further Bear Steepening Of The Yield CurveEquity Funding Cost Collapse Amid Accelerating Inflation Worries