Equity markets advanced on Wednesday following a cooler-than-expected CPI report. The CPI report was cooler than expected on a month-to-month and YOY basis and at the headline and core levels, spurring the index to advance roughly 1.0% at the high of the day. The bad news is that CPI is still hot relative to the Fed's target and did little to alter the outlook for interest rates. The data caused the odds for a 25 basis point hike to increase to near 100%.

The S&P 500 advanced on Wednesday, but resistance has slowed the index's advance. The next target for strong resistance is near 4,600, which might be reached within the next few weeks. The risk for the market is that the July Fed meeting or the Q2 earnings reporting cycle could cap gains. The EPS outlook continues to deteriorate, and additional interest rate hikes will do little to alter the trend.