Forget the Fed for a minute. Forget Santa. And earnings season is largely over now, with only 8% of the S&P 500 waiting to report their final numbers of the calendar year. The fate of the market will be decided early Tuesday morning.

That’s when the October CPI report comes out. It needs to be significantly lower than where it spiked back in August. If it comes in close to 3.7% . . . or worse, higher . . . Jay Powell is going to consider all the progress on inflation this summer just another “head fake.”

In that scenario, we’ll be getting a rate hike next month. That’s what Wall Street dreads. And odds are good the market mood will turn bitter in that event.

After all, every tightening move is a leap into the unknown. We have a pretty good sense now that the economy can handle short-term interest rates where they are . . . but which twist of the dial will boil us all?

If the Fed makes that move, we’ll probably survive. Unfortunately, the market will need a month or two to figure that out.

And during those months, the bear gets free rein. The S&P 500 might end 2023 with some of its gains but it doesn’t take a lot of downside from here to turn a pretty good year into a disappointment.

After the carnage of 2022, anything less than a roaring comeback will put a further strain on already shredded nerves. People will abandon the market for short-term debt paying 5-6% . . . it might not be great, but you’re locking in that return instead of risking a loss in pursuit of something better.

But if it turns out that inflation cooled last month despite the Fed’s pause, Powell gets what he wants. Rates have peaked for the foreseeable future. The market can take its cues from the fundamentals, which look better than they have all year.

Suddenly 5-6% in cash looks like settling for second prize. That money pours out of debt back into stocks. The bull market lives.

Everything depends on Tuesday morning.