The US will release December's CPI and PPI data at 21:30 on January 13th, a key timing point that has recently influenced the market. Currently, market sentiment is in a delicate balance—unexpected weakness in non-farm payrolls has reinforced expectations of Fed rate cuts, driving stock indices to new highs. However, this optimistic atmosphere could be disrupted at any moment—if the CPI data exceeds expectations, investors will have to reassess whether inflation is truly easing, and doubts about the Fed's policy path may arise.

This is the current dilemma. The expectation of rate cuts attracts funds into risk assets, with both stocks and cryptocurrencies benefiting from this liquidity surge. But if inflation data falls short of expectations, stock markets are likely to see a short-term correction, and investors' risk appetite will quickly shrink. PPI data should not be overlooked either—cost pressures at the production level often eventually pass through to consumers, affecting core CPI trends, which can put pressure on corporate profits and stock valuations.

From a technical perspective, the Dow and S&P 500 have hit new highs, but trading volume has not significantly increased, indicating that the market remains cautious at these high levels. Many investors are waiting and watching before chasing gains, observing how these data points will unfold. Highly volatile sectors deserve special attention because once market sentiment reverses, these sectors tend to be the first to react. The risk of short-term chasing is particularly high right now.

It is important to note that event-driven movements and trend continuation are fundamentally different. The new highs driven by non-farm payroll data may only be short-term impulses under policy expectations. Whether the actual trend can be sustained depends on the market's real response after the CPI/PPI releases—especially whether inflation data aligns with the Fed's policy trajectory. For medium- and long-term investors, rather than being frightened by a single data release, it’s better to focus on the bigger picture: whether the economy still exhibits resilience, and how the future monetary policy tone of the Fed will evolve.

Ultimately, this data release is a critical watershed for the market. The rally to new highs has been supported by rate cut expectations, but if inflation unexpectedly rises, it will pour cold water on this optimism. Investors should seize opportunities while remaining fully alert to potential volatility risks.