Investing.com — As concerns over U.S. economic growth and policy impact continue to weigh on the market, analysts at Wolfe Research are advising investors to prepare for potential opportunities ahead of Wednesday’s CPI report.

The U.S. stock market has experienced significant declines recently, with major indices, including the , Nasdaq, and , declining. 

The current drawdown for the SPX and NDX of -9% and -12% from highs is reminiscent of median drawdowns over the past 25 years, Wolfe Research notes.

Despite the fear-driven market activity, the firm highlights that “while the curve is unusually inverted and other fear indicators are in the red,” there has been no spike in critical market signals like the VIX or the equity put/call ratio to suggest a bottom has been reached. 

Analysts also point to tariffs in limbo and the looming CPI report as key factors to watch.

According to Wolfe Research, “With tariffs in limbo for the next few weeks, Wednesday’s CPI report is likely to be the next major catalyst.” 

The firm adds that history suggests that CPI readings early in the year tend to be hotter due to seasonality adjustments. As such, analysts are positioning themselves for “more of a washout to buy ahead of Wednesday’s print.”

Overall, Wolfe Research sees potential for a recovery after Wednesday’s CPI report and advises investors to look for opportunities to buy U.S. stocks ahead of the data release.