The May consumer price index increased 8.6% year-over-year, its highest level since 1981, putting pressure on the stock market. In addition, the consumer sentiment fell sharply to a record-low reading of 50.2, down from a May reading of 58.4, flaming concerns about a potential recession in the U.S. economy. As the economy could see a more aggressive monetary policy tightening, the stock market is expected to remain extremely volatile.
Also, the 2-year Treasury yield, which is significantly sensitive to the Fed rate, has recently hit its highest level since 2007, trading above 3%. The S&P 500 is down nearly 19% from its record. However, this provides a golden buying opportunity for investors because many quality stocks are now trading at attractive valuations.
