Equity markets tread water on Monday as investors brace for a turbulent week. Few earnings reports or economic releases exist, but Friday will bring the PCE price index. The PCE Price Index is the Fed's favored tool to gauge inflation and is expected to be mixed. The core reading is expected to cool compared to the previous month, but the headline will accelerate. Because the headline is a leading indicator of core inflation, it will point to another interest rate hike this year. In this scenario, the FOMC will hike rates to the highest level in over a decade and send more banks to the brink of collapse.

The equity market is at a critical turning point. Either the market will get its feet back under it, or it won't. The market will likely rally higher into the New Year if it can regain footing. If not, the selloff will gain momentum and threaten to wipe out all of this year's gains. In that scenario, momentum could build as investors run for cover and take the S&P 500 back to the depths of 2022's lows.