Equities wobbled on Tuesday as investors prepare for what could be a game-changing CPI read for the FOMC. Today's read laps the onset of high inflation for the first time and is expected to rise another 8% YOY. At this pace, the FOMC almost has no choice but to raise interest rates aggressively and possibly by 75 basis point increments. The next FOMC isn't until June but there is a high expectation for another 50 basis point hike and a slim chance for a larger 75 basis point hike. The next hurdle for the market after the CPI will be the PPI data on Thursday and it, too, is expected to be hot.

The takeaway is that inflation is still on the rise and cutting into corporate profits. S&P 500 companies have been able to maintain their margins so far via price hikes but consumer push-back has begun. With earnings coming under increasing pressure and the FOMC in danger of stalling the economy, there is a real danger for corporate earnings growth to stagnate and the S&P 500 to enter a deeper correction.