S&P 500 Seen Dropping 10% on Fed Hikes, MRA Strategist Says

Live updates

1. 28d ago

   US Stocks Slip After Federal Reserve Raises Interest Rate

   United States equities retreated after the Federal Reserve implemented its first main interest rate increase in three years. The central bank indicated that further rate hikes could follow in its ongoing effort to control high national inflation. Prior to this policy decision, market indices such as the Nasdaq and S&P 500 had climbed as an oil price retreat tempered pre-meeting jitters. These market movements unfold against a backdrop of rising Treasury yields and prior warnings from strategists regarding potential equity pullbacks.

   Why it matters

   Federal Reserve monetary policy decisions directly drive broader market sentiment, impacting bond yields and equity valuations across major indexes. Previous market sessions experienced pressure from surging 10-year Treasury yields and artificial intelligence safety fears alongside central bank deliberations. Analysts previously warned that impending monetary tightening cycles carry significant downside risk for major benchmarks like the S&P 500.

   What is confirmed

   • U.S. stocks slipped Wednesday after the Federal Reserve hiked its main interest rate for the first time in three years.
   • The Federal Reserve suggested more rate hikes may be ahead as it tries to get the nation's high inflation under control.

   Still unconfirmed

   • Nasdaq and S&P 500 climbed as an oil retreat tempered pre-Fed jitters.

   What to watch next

   • Further announcements from the Federal Reserve regarding future interest rate trajectories
   • Subsequent reactions in bond markets and the 10-year Treasury yield
   • Future performance of the S&P 500 and Nasdaq indices
   Sources used for this update (2)

   1. www.usatoday.com — Nasdaq, S&P 500 climb as oil retreat tempers pre-Fed jitters
   2. www.pbs.org — U.S. stocks slip after the Fed raises interest rates, hints more hikes may be on the way
   confidence 80%
2. 29d ago

   S&P 500 Faces 10% Drop Risk as Fed Hikes and Yields Surge

   Stock futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq retreated as the Federal Reserve began a two-day meeting. Market pressure mounted as the 10-year Treasury yield passed the 5 percent mark, hitting its highest level since 2007. An MRA strategist warned that the S&P 500 faces an 8 percent to 10 percent pullback risk driven by impending Federal Reserve rate hikes. Bond markets slumped alongside the equity futures retreat, which was also influenced by artificial intelligence safety fears ahead of the central bank policy decisions.

   Why it matters

   The convergence of rising Treasury yields and aggressive monetary policy tightening creates severe downward pressure on equities. Bond market slumps directly reflect investor anxiety over the trajectory of interest rates. Federal Reserve meetings routinely drive market volatility, but current macro headwinds amplify the risks for major stock indices.

   What is confirmed

   • The S&P 500 faces an 8 percent to 10 percent pullback risk as Federal Reserve rate hikes loom, according to an MRA strategist.
   • Dow, S&P 500, and Nasdaq futures retreated ahead of the Federal Reserve meeting amid AI safety fears.
   • The US 10-year Treasury yield passed the 5 percent mark and hit its highest level since 2007, as bonds slumped.
   • The Federal Reserve began a two-day meeting.

   What to watch next

   • The conclusion of the Federal Reserve two-day meeting and subsequent policy announcement
   • Further movement in the US 10-year Treasury yield past the 5 percent threshold
   Sources used for this update (5)

   1. Bloomberg.com — S&P 500 Seen Dropping 10% on Fed Hikes, MRA Strategist Says
   2. Reuters — Bonds slump as US 10-year Treasury yields hit highest since 2007
   3. Yahoo Finance — Stock market today: Dow, S&P 500, Nasdaq futures retreat ahead of Fed meeting amid AI safety fears
   4. Seeking Alpha — S&P 500 faces 8%-10% pullback risk as Fed rate hikes loom, strategist says
   5. MarketWatch — Stock Market Today: Dow, S&P 500 and Nasdaq set to fall as 10-year Treasury yield passes 5% mark; Fed begins two-day meeting
   confidence 95%