MarketBeat Minute(2021-05-05)

The broad market gave up some ground on Tuesday as rising signs of inflation stoke fears of higher interest rates. Not only are there systemic signs within the S&P 500 of rising inflation but Treasury Secretary Janet Yellen says a small rate hike may be needed to keep the economy from overheating. With the April NFP report on tap for Friday and expected to be strong there is a chance that good news will be too good for the market to handle because it will reinforce the idea that interest rates are going to rise.

In other news, the VIX or so-called ?fear gauge? surged more than 10% on Tuesday to hit a one-month high. The move raises the odds for a significant correction in the S&P and should not be taken lightly. With the VIX above the short-term 30-day moving average, the most likely direction for fear to move is higher and that means lower prices for the S&P 500.