Equity markets retreat on Wednesday on a double dose of bad news. On the earnings front, better-than-expected earnings are offset by weak guidance, while on the economic front, the yield on the 10-year treasury rose to another new high. The 10-year rise suggests the FOMC will continue to hike rates to near 5.0% in its fight against inflation. The Fed needs to see a significant decline in demand to ensure inflation is tamed, which has yet to be seen in the data.

The S&P 500 fell more than 1.25% at the session's low, showing persistent resistance at the short-term 30-day EMA. If that level can't be crossed, the market will likely fall. The decline could build significant momentum if the guidance continues to be negative. The S&P 500 could fall back to the recent low or lower in this scenario. Critical support is near 4,224 for the S&P, a move below there could produce another 5% decline for stocks.