Good morning, traders. If you're wondering what today's market narrative looks like, here's the simple version: everything hinges on inflation data.

Today's session centers around one of the most important inflation reports of the quarter, the December CPI release. This data will heavily influence expectations around the Fed's next policy steps and has the potential to drive sharp moves across equities, bonds, and rates. Ahead of CPI, the Weekly ADP Employment Change provides additional context on labor conditions leading into the inflation print.

Following CPI, attention will remain high through the morning with Redbook Retail Sales at 8:55 AM ET and New Home Sales at 10:00 AM ET, alongside the RCM TIPP Economic Optimism reading. The Treasury schedule adds another volatility catalyst with a 30 Year Bond Auction at 1:00 PM ET, which can influence yields and equity positioning into the afternoon. Fed speakers later in the day from Musalem at 10:35 AM ET and Barkin at 4:00 PM ET may add further commentary around growth and inflation dynamics.

With CPI setting the tone, expect elevated volatility, fast directional moves, and potential reversals as markets digest the data. Position sizing and patience will be critical today as liquidity shifts rapidly around the release.

Let's break down the technical picture for the major indices and mega-cap stocks that matter most.

SPDR S&P 500 ETF Trust

SPY is currently trading around 694.75 as markets brace for a major CPI driven session. Holding above this area early would signal buyers are still willing to lean into risk despite the macro backdrop. If that support holds, SPY could work higher toward 696.10, where sellers may begin to test conviction. Sustained strength through that zone opens the door to 697.60, with momentum potentially extending into 699.25 if CPI comes in favorable and risk appetite expands across equities.

If SPY fails to hold 694.75, sellers may press quickly into 693.20 as the first downside check. A break there would likely bring 691.85 into focus, an area where buyers may attempt to slow downside. Continued weakness could expose 690.40, and if CPI surprises to the upside, a deeper flush toward 688.75 becomes possible as traders de-risk ahead of further volatility.

Invesco QQQ Trust Series 1

QQQ is currently trading near 626.25, sitting at an important inflection point for tech ahead of CPI. A firm hold here could allow buyers to push price into 627.90, where acceptance would be key. If momentum builds, QQQ may grind higher toward 629.75, with a stronger upside reaction targeting 631.50 as growth stocks respond positively to cooling inflation data.

If 626.25 fails, sellers may take control quickly and drag price into 624.80. Losing that level opens the door to 623.10, where buyers must show up to avoid acceleration lower. If pressure intensifies, QQQ could slide into 621.50, reflecting broader risk reduction in higher beta names following CPI volatility.

Apple Inc.

Apple Inc. (AAPL) is currently trading around 259.25, attempting to stabilize after recent rotation out of mega caps. Holding this level would keep the door open for a recovery push into 260.35. Continued strength could carry Apple toward 261.60, with a more bullish CPI outcome allowing price to stretch into 262.90 as dip buyers regain confidence.

If AAPL loses 259.25, sellers may push price into 258.10 quickly. A breakdown there puts 256.95 in play, an area that has previously attracted buyers. If selling accelerates alongside a negative macro reaction, Apple could drift into 255.75 as traders reduce exposure into uncertainty.

Microsoft Corp.

Microsoft Corp. (MSFT) is currently trading near 475.50, hovering just above a key short term balance zone. A constructive reaction higher could bring 476.90 into play, with follow through strength lifting price toward 478.40. If CPI supports risk, Microsoft may attempt to reclaim 480.10 as buyers rotate back into large cap leadership.

If 475.50 fails, sellers may test 474.20 early. Losing that level could expose 472.85, where downside momentum may slow. Continued weakness opens the door to 471.30, signaling broader caution in enterprise focused tech as macro uncertainty weighs on sentiment.

NVIDIA Corporation

NVIDIA Corporation (NVDA) is currently trading around 185.00, sitting at a critical pivot ahead of CPI. Holding this area could spark a push into 186.40, where acceptance would be needed to continue higher. If buyers step in aggressively, NVIDIA could extend toward 188.10, with upside momentum potentially carrying into 189.75 as semiconductors catch a bid.

If NVDA breaks below 185.00, sellers may lean into 183.95 quickly. A failure there exposes 182.60, and if risk sentiment deteriorates sharply, price could slide into 180.90 as traders pull back from high beta exposure.

Alphabet Inc Class A

Alphabet Inc. (GOOGL) is currently trading near 334.25, holding elevated levels as markets await inflation data. A sustained bid here could drive price toward 335.80, with continuation allowing a move into 337.60. If CPI aligns with easing inflation expectations, Alphabet could stretch toward 339.25 as buyers maintain control.

If 334.25 fails, sellers may press into 332.90 as an initial test. Breaking that zone could open downside toward 331.40, with deeper weakness bringing 329.85 into focus if macro pressure builds across equities.

Meta Platforms Inc.

Meta Platforms Inc. (META) is currently trading around 641.75, attempting to regain balance after recent volatility. Holding above this level would allow buyers to probe higher toward 644.10. Continued strength could lift Meta into 646.75, with a favorable CPI reaction potentially extending the move toward 649.50 as risk appetite improves.

If META loses 641.75, sellers may test 639.80 quickly. A breakdown there could drag price into 637.60, and if downside momentum accelerates, a move toward 635.25 becomes possible as traders reduce exposure into uncertainty.

Tesla Inc.

Tesla Inc. (TSLA) is currently trading near 449.75, sitting at a pivotal area where buyers and sellers are evenly matched. Holding this zone could allow a push into 451.90, with momentum building toward 454.25 if CPI supports risk assets. A strong upside reaction may stretch into 456.75 as volatility expands.

If Tesla breaks below 449.75, sellers may force a move into 447.40. Continued weakness could expose 445.10, with a sharper CPI driven selloff pulling price toward 442.75 as traders de-risk aggressively.

The bottom line? Today is all about discipline and nimbleness. The CPI print will set the tone, and the market's reaction could be swift and unforgiving. Trade carefully and stay alert as the session unfolds.