As investors eagerly await February's Consumer Price Index (CPI) print on Tuesday, Rockland Trust Chief Investment Officer Dave Smith joins Yahoo Finance Live to share his outlook on equity markets in light of the anticipated inflation data.

Smith acknowledges that the last two CPI prints came in higher than expected. However, he notes last week's jobs data showed lower-than-expected wage growth, making him optimistic: "That was a precursor of what we might see tomorrow." He believes that if the results align with the 3.1% expectation, it would be "a good thing" for the economy. Nonetheless, Smith cautions, "there's always a risk that you don't see."

Despite economic uncertainties, Smith notes that the S&P 500 (^GSPC) is "trading at a fair valuation," with risks already priced in. However, with the Federal Reserve's potential rate cuts looming, Smith suggests that markets should have "a higher-priced multiple."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

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Editor's note: This article was written by Angel Smith

Video Transcript

RACHELLE AKUFFO: Well, stocks moving lower to start the week after the equal weighted S&P 500 logged its seventh straight week of gains. Investors are shifting focus to Tuesday's inflation print for any hints of what to expect from the Fed's March meeting.

For more on this, I'm joined by Dave Smith, Rockland Trust chief investment officer. Good to see you on this Monday morning. So you note that the primary drivers for some of the volatility that we're seeing, the Fed, and AI.

So starting with the Fed, obviously, some key inflation prints this week, starting with CPI Tuesday, PPI on Thursday. What are the expectations there?

DAVE SMITH: Well, 3.1 is the expectation-- good morning, Rachelle-- for the CPI number tomorrow. And we'll be looking at that very closely. Obviously, last week, we got the jobs data. And in that data, there is a measure of wage growth. And wage growth actually came in lower than expected, which is a good sign.

The last two prints on CPI in the previous two months, actually, came in higher than expectation. So I'm hoping that last week results was a precursor of what we might see tomorrow. And the expectations will come in-- the actual results will come in very close to expectations. And I think that would be a good thing, if that's the case.

RACHELLE AKUFFO: And Dave, you still see the odds of a soft landing as reasonably high. But you also know that the biggest risk to the soft landing narrative might be the risks that we aren't considering yet. How do you invest with that in mind?