Equity markets were mixed and flat early on Thursday as market momentum waned. However, the day turned into a rout for the bulls following hawkish comments from Fed chief Jerome Powell. He says the Fed is not confident that it has done enough to tame inflation, and more rate hikes may be needed. This is contrary to a recently firmed opinion that the Fed was near the cycle's peak and put a cap on equities.

The S&P 500 is showing resistance near recent highs and may not be able to move much higher without another catalyst. The next big market-moving events will come next week with reports from major retailers and the CPI report. The CPI may show another cooling in inflation and provide a lift for equities; the risk is that a CPI-driven rally may quickly reverse when Target and Walmart report later in the week. Walmart has been a resilient player, gaining market share and controlling shrinkage, while Target loses share and struggles with theft.