Equity markets retreat again on Wednesday as market participants gauge the impact of high-interest rates, high inflation, and the growing chance the US will enter another government shutdown. Debt ceiling negotiations are at the forefront of everyone's mind and are helping to drive the markets, but it is not what will bring the S&P 500 down. A growing number of companies are indicating 2nd quarter or 2nd half weakness that is taking a toll on the earnings outlook. If there is anything that moves the S&P 500, it is the outlook for earnings.
The next 2 days will be a test for the market. The S&P 500 continues to show resistance at the 4,150 level, and the PCE price index is due out on Friday. The index is not expected to give the Fed much reason to pause and may keep equities from moving higher. With the summer fast approaching, the odds of a summer rally are fast diminishing.