Equities pulled back from the recent high on Thursday as the market braces for another hot PCE price index reading. The move confirms resistance below the 3,900 level and sets the S&P 500 up for another test of the recent lows should the market not like the PCE data. As it is, the market is expecting the index to accelerate on a YOY basis from the previous month and to come in just shy of a recent record. At these levels, the index will be at the highest reading in several decades and pointing to another aggressive FOMC interest rate hike.

The next FOMC meeting is less than a week away. The November Fed meeting begins on Tuesday and will culminate with a policy statement and press conference on Wednesday afternoon. The market is pricing in a near 100% chance for a 75 basis point hike and it could come with hawkish commentary, too, if the PCE index is hotter than expected. The takeaway is that inflation is still the driving force of the market and it is still a growing problem.