The sell-off in equities extended for a third week with the S&P 500 shedding about 2% for the session. The move was driven by increasing fear of FOMC aggression and could easily take the index back down to the 4,200 level. The risk for the market now is that 4,200 will not hold and a much deeper decline is on the way. That decline could be sparked by the Fed when it begins hiking rates because there is a real risk of recession. The CME Fedwatch Tool has the market pricing in 8 to 10 quarter-point hikes by July which would be the fasted pace in living memory.

Next week's action will be all about earnings and inflation. The peak of Q1 reporting begins next week and should bring upwards of 100 earnings reports from S&P 500 companies. On the inflation front, the PCE Price Index is slated for release on Friday and could mark the end of any pretense of bullishness in the market. This will be the 13th report since inflation began to spike and there is every indication it will be another hot report.