Equities started Wednesday on solid footing rising more than 1.0% ahead of the FOMC meeting. The weaker-than-expected CPI gave the market some hope the Fed would give some relief and those hopes were dashed. While the Fed hiked rates by only 50 basis points the new statement indicated the peak of interest rates will likely be over 5.0% and remain at that level into 2023. This news caused the market to reverse course and the S&P 500 shed 0.60% at the close of the session.

The next hurdle for the market is the PCE price index which comes out next Friday. If the index confirms a downtrend in the pace of inflation it could send the market soaring and usher in the Santa Claus Rally. If not, the market could be in for a rough holiday as traders and investors begin to position for what could be a very bad year for stocks.