The stock market has suffered severe selling pressure over the past few weeks, with the Dow Jones Industrial Average posting its sixth straight losing week, while the S&P 500 and the Nasdaq Composite posted losses for the fifth week in a row. Last week, the Nasdaq Composite declined 1.5%, while the S&P 500 and the DJIA fell more than 0.2% each.
Given that inflation is at its highest level since December 1981, the Fed maintained its aggressive stance by raising the benchmark interest rate by half a percentage point last week. And although Fed Chairman Jerome Powell dismissed raising the interest rates by 75 basis points, the Fed is likely to maintain its hawkish stance in coming weeks and months because it is committed to restoring price stability. Furthermore, Morgan Stanley (MS) equity strategist Mike Wilson believes that the S&P 500 will join the bear market within weeks amid fears of aggressive monetary policy tightening.
