Equity markets continued to decline last week after inflation data pointed to a high likelihood of additional FOMC interest rates. The steady pace of CPI combined with hotter-than-expected PPI and rising oil prices suggests that inflation could accelerate and drive the FOMC to hike rates not 1 more time but 2 or more. In this scenario, there will be multiple bank failures and a curb on consumer demand unlike any in more than half a century.

The S&P 500 shed about a half percent, moving to a 1-month low for the week. There are no significant targets for solid support above the 150-day EMA, so a larger decline is expected. A move down to that level would be worth another 4.5% for the broad market and open the door to an even deeper decline. This week, the FOMC minutes will give additional clues to the FOMCs next move and could move the market.