The equity market resumed its selloff on Tuesday as investors brace for the PCE price index. The PCE price index is due on Friday and is expected to show inflation accelerating and point toward another FOMC interest rate hike. The increase in fear is significant because the market is not concerned about a single 25 basis point hike but the possibility of several more hikes. That fear is manifested in the 10-year Treasury yield, which gained about a half percent to move to a new high and the highest level since 2007. The charts look like the 10-year yield could move up above 5.0% soon and remain at those levels indefinitely.

The VIX is another concern for investors. The VIX is the S&P 500 "fear index," and it had fallen to the post-pandemic low due to complacency. Now the index is surging higher, at the highest levels in a month, and heading higher based on the indications. In that scenario, the VIX could rise 50% to 100% from its current levels, which suggests another 20% decline in the S&P 500.