(Bloomberg) -- Equities traders are likely to shrug off any evidence of stubborn inflation in Friday’s consumer price index report, as the market narrative is dominated by optimism for an expected Federal Reserve interest-rate cut next week.

Such is the view of JPMorgan Chase & Co.’s trading desk, which sees a roughly 65% chance the S&P 500 Index will advance following the release despite economists expecting an elevated print. The team including Andrew Tyler laid out scenarios for stocks on CPI day that are “less volatile than usual,” with investors’ expectations that the Fed will ease again on Oct. 29 likely offsetting any inflation-related angst.

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“We agree with the market’s view and think it would take the largest of tail-risks to push the Fed to the sideline,” Tyler, JPMorgan’s head of global market intelligence, wrote in a note to clients on Wednesday.

Economists forecast a 0.3% rise in the September core CPI reading, which excludes the more volatile food and energy components, from a month earlier, according to a Bloomberg survey of estimates. That would leave it up 3.1% on an annual basis, in line with the prior month and well above the Fed’s 2% target.

Friday’s CPI print — the first major economic report to be released since the government shutdown began on Oct. 1 — has outsized importance for investors. The data will be among the few clear signals on the state of the economy ahead of the interest-rate meeting, and will likely set the tone for markets for the remainder of the year.

The Bureau of Labor Statistics has called back a small group of workers to put out the report so the Social Security Administration can calculate next year’s cost-of-living adjustment for payments to beneficiaries.

A print that’s either in-line or cooler than estimated will likely push the S&P 500 higher by as much as 1.5% on Friday, according to Tyler and his colleagues. At the same time, a hot report in which core inflation climbs by more than 0.4% from August could trigger a drop of as much as 2.3% or so.

“It is stale news but will be a frame of reference given the lack of economic information tied to the government shutdown,” said Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors. She views any potential volatility from the data as a buying opportunity amid interest-rate easing, earnings growth and the fourth quarter seasonally being the strongest period of the year.

The headline figure is estimated to climb 0.4% on a monthly basis and 3.1% from a year ago, slightly above August’s year-over-year reading.

Wall Street pros are largely betting on two more rate cuts this year amid signs of cracks in the labor market, with one of the two all but priced in for next week. However, a worse-than-expected inflation picture on Friday could complicate the outlook for further reductions at the end of this year and into 2026.

“A hotter print might give them pause at the December meeting,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. “Given their focus right now is on the labor market, which continues to cool, an October cut seems prudent. But after that it gets a little more open-ended, although we believe they will also cut in December.”

The US stock rally has been tiring out after the S&P 500 soared 35% from April’s lows, as stretched valuations confront a murky economic backdrop and mixed earnings results from Corporate America.

The CPI reading on Friday could spark some additional volatility, but it’s likely to be offset by easing monetary policy, according to Samana, who’s urging clients to look through the noise and keep buying high-quality stocks. He says investors have figured out that the Fed’s hands are somewhat tied given the cooling labor market, which is why recent pullbacks in US stocks have been short and shallow.

The government shutdown, now in its 23rd day, is the second-longest in history after the 35-day closure in 2018 during President Donald Trump’s first term. It’s not the stalemate in Washington that raises the stakes for Friday’s inflation data, but where we are in the economic cycle, with the labor market moderating while inflation remains stubbornly high, according to Cayla Seder, macro multi-asset strategist at State Street.

While a higher CPI reading on Friday is unlikely to substantially pummel stocks, it could trigger a reversal in the equity-market broadening that’s been underway, she said.

“Higher inflation would limit the Fed’s ability to ease policy, which would be a headwind for equity broadening and rotation,” Seder said. “It would support allocation toward high-quality, less interest-rate-sensitive parts of the market.”

--With assistance from Jessica Menton.

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