US stocks attempted a rebound on Tuesday after the S&P 500 fell into a bear market on Monday.
The back-and-forth volatility comes as investors fret about the prospect of rising interest rates.
The Federal Reserve is now expected to raised interest rates by 75 basis points on Wednesday.
US stocks traded higher on Tuesday, attempting a turnaround after the S&P 500 dropped nearly 4% on Monday and officially entered bear market territory.
The back-and-forth volatility in the stock market comes as investors fret about an expected sizable increase in interest rates on Wednesday when the Federal Reserve concludes its meeting of the Federal Open Market Committee.
The Fed was previously expected to raise interest rates by 50 basis points, but following Friday’s hot CPI inflation report, the central bank is now expected to raise interest rates by 75 basis points. Though, there’s no telling if the interest rate hike will help cool inflation, which is mainly being driven by supply side constraints, rather than demand.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Tuesday:
Goldman Sachs is now warning investors that the chances of a US recession are on the rise as the Fed is likely to hike interest rates by 75 basis points at its next two meetings. Traders now expect the Fed to hike rates to close to 4% in 2023.