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(Bloomberg) -- While the fight against inflation may largely have been won, tensions over price pressures could still disrupt confidence about interest-rate cuts. The stock market seems to be looking past these warnings.

Equities have flourished in the favorable “Goldilocks” conditions of a resilient economy, falling inflation and rate cuts. Yet there are worrying signs in price movements, while reflationary expansionist fiscal policies could pose a risk to the easing cycle. Tariffs under Donald Trump’s administration threaten to bump up inflation projections for next year. For the moment, all eyes are on Wednesday’s US consumer price index figures.

Investors appear sanguine in the hours leading up to the print, with options on the S&P 500 index implying a move of 45 basis points. That’s lower than the average realized move of 71 basis points over the past year, according to Bloomberg calculations. December S&P 500 futures were 0.1% higher as of 7:30 a.m. New York time.

“The market is underpricing CPI risk,” said Bank of America Corp. derivatives strategists including Gonzalo Asis. “We believe CPI matters more this time.”

The strategists note that the market has under-reacted on CPI days since February, with more focus instead on the growth outlook. Yet, worries about the economy have moderated, while the November inflation surprise data climbed by the biggest margin since May.

That has set up inflation readings and central bank meetings as this month’s biggest risk events. A cooler CPI print today can clear the path for a late December rally, in what’s typically the second-strongest period in the year for stocks. A hotter print could revive volatility, the BofA team says.

A surprise in inflation to the upside could prove a problem because stocks are showing some vulnerability to a shock, following the latest market moves and positioning by traders.

Flows from options dealers setting up hedging positions have acted as a market stabilizer in recent weeks. This so-called long gamma meant dealers had to buy if the market moved lower and sell if it moved higher, which reduced the potential for high volatility.

With the S&P Index’s latest decline — US stocks have dropped for two sessions — the benchmark lost part of its downside gamma buffer, according to option specialists at Tier 1 Alpha. “The 6050 strike is now the last meaningful pocket of positive gamma before we venture into that no man’s land around the gamma flip point,” they wrote, referring to S&P 500 levels. The index closed near 6,035 points on Tuesday.