Equity markets did an about-face on Wednesday, rising in early trading and then falling after the FOMC announced more interest rate hikes were coming. The FOMC paused in June, holding rates steady, but indicated inflation was not tamed and that 2 more should be expected. The news sent the odds on the CME's FedWatch Tool rocketing higher, indicating a significant outlook shift. The takeaway is that interest rate cuts should not be expected in 2023 without a significant decline in inflation.

Action in the S&P 500 was mixed. The index moved up, down, and sideways during the session while market participants digested the news. The implications for stocks are negative; rising rates are cutting into demand, which is capping the outlook for earnings. The market closed with a small gain for the day, creating a large Doji candle signifying significant uncertainty. The market may move higher from here, but it is climbing a wall of worry and heading toward a ceiling put in place by the Fed.