Equities rebounded on Thursday and may move higher but it all depends on today's read of the PPI index. The index is expected to support the idea of ongoing FOMC interest rate hikes so may not be a catalyst for buying. The caveat is that producer prices may come in on the weak side which is a catalyst for higher index prices albeit a dubious one. A single month of weak inflation data is not a trend nor does it signal the end of FOMC policy tightening.

Next week will bring another read of the CPI index as well and this time it will come before the FOMC meeting. The CPI is much more important than the PPI and may send another jolt through the market.

The takeaway is that the FOMC is going to keep hiking rates and will do so by at least 50 basis points next week. This will add additional pressure to the earnings outlook and may bring the S&P 500 down with it. The risk is the Fed will either increase the hawkish tone of the statement or the CPI will put another 75 basis point hike on the table.