The stock market has officially entered bear market territory with investors' growing concerns over the possibility of harsher movements from the Fed to tame the multi-decade high inflation. The Bureau of Labor Statistics reported that the U.S. consumer price index rose 8.6% last month, the fastest increase since December 1981. This surprising inflation report is expected to force the Federal Reserve to consider a 0.75-percentage-point interest rate increase at their meeting this week.
The major stock market indexes witnessed significant declines following the release of the May inflation data. According to a Financial Times survey, almost 70% of economists expect the U.S. to slide into a recession in 2023 due to the stock market decline and Federal Reserve’s attempt to reduce the rising inflation. However, amid the current market turbulence, investors should secure themselves by investing in stocks that can withstand high inflationary pressures and generate stable returns.
