Analysts: A rate cut in September is almost a certainty, and options traders expect the stock market to operate steadily.

On September 7, as the Fed's rate cut in September has almost become a foregone conclusion, option traders generally expect the stock market to operate steadily before the CPI data is released on Thursday. However, if the data shows inflation heating up, such bets may carry hidden risks. The logic behind the market's expectation of a rate cut is quite simple: U.S. job growth has stagnated, and the economy needs stimulus. Friday's weak employment data further reinforced this expectation, prompting investors to fully price in a 25 basis point rate cut by the Fed next week. The market reacted mildly to this: U.S. stocks fell slightly on Friday, the fear index rose slightly, but still remained well below the key level of 20, mostly maintaining below this level since June. Looking ahead, option traders are betting that the S&P 500 index will experience about 0.7% two-way fluctuation after the CPI is released on Thursday, below the past year's average actual volatility of 1%. However, this trading logic overlooks a major risk: what if the inflation data significantly exceeds expectations? "The current balance is very delicate," said Eric Teal, Chief Investment Officer of Comerica Wealth Management. "Any very positive or very negative data could change the market outlook."