A fresh look at US inflation trends this week is set to test Wall Street’s record run, with several strategists warning that equities may be primed for a pullback after months of near-uninterrupted gains.The benchmark S&P 500 closed on Friday up more than 8% for the year and near all-time highs, while the Nasdaq Composite set a new record, rebounding from early August losses triggered by weak US jobs data, according to Reuters report. The rally has lifted the S&P 500 by 28% from its April low, calming fears of a tariff-driven recession that had spiked after President Donald Trump’s “Liberation Day” announcement earlier this year.Strategists at Deutsche Bank and Morgan Stanley have cautioned that the market’s steep climb has pushed valuations to historically expensive levels as the seasonally weak August–September period begins. “I do think the market is set up for a bit of a pullback. There’s a lot of concern bubbling underneath,” said Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth.CPI report, Fed rate cuts and tariff risksThe July consumer price index (CPI), due Tuesday, is forecast to have risen 2.8% year-on-year, according to a Reuters poll. Analysts say stronger-than-expected inflation could temper expectations of imminent interest rate cuts, even as futures markets price in a 90% chance of a September Fed cut and at least two cuts this year.Morgan Stanley’s Michael Wilson warned that “a softer payroll number with concerns of tariff-related inflation could be the recipe for … a correction, especially in the seasonally weak third quarter,” though he maintained a bullish 12-month outlook, saying “we’re buyers of pullbacks.”Tariffs at century-high average levelsTrump’s new import levies took effect on Thursday, raising the average US import duty to its highest in a century. Additional tariffs on semiconductor chips and pharmaceutical imports have been announced, while China could face higher duties on Tuesday unless a truce is extended.“The market has kind of ignored the potential negative impact of this friction to the economy,” said Matt Rowe, senior portfolio manager at Man Group. “The market has gotten comfortable with tariffs being kind of a non-event, which I don’t think is correct.”