Here is a breakdown of where each market driver currently sits:
The Federal Reserve announced last week that, while they would keep interest rates at their current level, they expect more rate hikes on the horizon. Also, the Fed suggested that rates may remain higher for longer than they initially anticipated. The Fed “dot plot” indicated that they expect at least one more rate hike this year, and that rate cuts will not begin until June 2024.
After spending 10 consecutive days earlier this month within 1% of its 50-Day Moving Average, the S&P 500 has now fallen over 6% off of its 52-week high. It remains to be seen whether the 200-Day Moving Average can provide support for this drawdown.
The current market pullback has seen the AAII Investor Sentiment Survey return to a majority bearish opinion, with over 40% of respondents indicating that they feel bearish about the next six months in the stock market.
