Equity markets received a rude awakening on Tuesday when Fed chief Jerome Powell's prepared remarks to the congress were released to the public. In the remarks, Mr. Powell reveals inflation is not tamed, the FOMC is on track to continue raising rates, another 50 basis point interest rate hike may be necessary, and peak interest rates may be higher than the market expected. The news caused the S&P 500 to retreat more than 1.5% at the day's low, confirming resistance to higher prices at the 30-day moving average.

The risk for the market is definitely tilted toward the downside following this news. Higher rates for longer will have a more profound and longer-lasting impact on the economy, which will be seen first in the earnings outlook. The outlook for S&P 5-- earnings was already declining; an acceleration in the downtrend will add additional pressure to the index and stocks in general.