Equity markets held their ground on Wednesday following the surprise sell-off on Tuesday. The caveat is that Fed chief Jerome Powell's comments will have a rippling impact on the economy, so the sell-off is far from over. The odds of another 50 basis point interest rate hike have gone above 75% and may go higher should the upcoming inflation data be strong. The next round of CPI data is due next week and may confirm the acceleration of consumer-level inflation.

The next move for the S&P 500 will be a critical one. Now that the downward bias is increasing, the index's next stop is likely to be lower, and it could be much lower. Many Wall Street strategists have come out since Mr. Powell's comments and lowered their targets for the S&P 500. The number that rings loudest is 3,200, which puts the index at a new low.