Over the past few months, the stock market's volatility has surged amid rising macroeconomic headwinds. The benchmark S&P 500 index recorded its worst April in 52 years, tumbling 4% over the last month. U.S. stocks closed out a brutal month in which investor worries were compounded by persistent inflation, the Fed's tighter monetary policy, weak corporate earnings, COVID-19 case spikes in China, and a Russia-Ukraine war.
This week the Federal Reserve raised interest rates by half a percentage point to combat 40-year high inflation and restore price stability. This is the largest interest rate increase in 22 years. The aggressive increase and expectations of an economic slowdown are expected to be the main contributors to investors' bearish sentiment.
