The sell-off in equities gained momentum on Thursday after traders digested the meaning of Fed chief Jerome Powell's latest comments. The takeaway is that FOMC interest rates can be expected to rise past the 5.5% mark and possibly top 6.0% by mid-year. This means another 50 basis point hike is on the table, and another could follow if the data does not warrant it. The next big hurdle regarding data is the CPI index which is due out next week, and it should be expected to confirm the acceleration of inflation indicated by the PCE price index.

The S&P 500 formed a large black candle that again confirms the presence of resistance at the short-term moving average and the 4,000 level. The candle moved down to set a new low which is the most concerning part, and this low may lead to additional lows today and next week. A hot CPI report could be the catalyst that takes this market back down to the 2022 lows.