Wall Street’s three main indexes weakened last week as tighter monetary policy signals from the Federal Reserve keep making investors nervous. On Thursday, Fed Chair Jerome Powell said that a 50-basis-point hike would be “on the table” when the Fed meets in May.

Jerome Powell warned that “inflation is much too high,” while the impact of the Russian-Ukrainian war sent commodity prices to multi-year highs.

Supply-chain issues are also one of the main reasons behind the global inflation run, and more than 20% of the world’s active container ships are currently trapped in traffic jams in congested ports.

The U.S. reported the March Consumer Price Index rose to 8.5% YoY, which is a fresh multi-decade high, and FED members believe that inflation is likely to continue higher than predicted for longer.

St. Louis Fed President James Bullard says that he wouldn’t rule out a 75 basis-point hike and raised the possibility of another hike in June. Stifel Chief Economist Lindsey Piegza said:

While we anticipate a 50bp increase next month and a second 50bp increase in June, with growth poised to slow significantly in the second half and recession risks on the rise, it will be difficult for the Fed to make the argument to continue rate hikes at such an aggressive pace, let alone step up the size of target rate hikes.

The U.S. will release gross domestic product figures for the first quarter next week, but investors’ focus will also be on the quarterly earnings reports.

It is important to mention that there are some concerns this earnings season, and expectations are the lowest since the recovery started.

Next week, Coca-Cola, 3M Co, Boeing, General Electric, General Motors, Alphabet, Microsoft, Visa, The Kraft Heinz, Amgen, Ford, PayPal, Qualcomm, Caterpillar, Mastercard, McDonald’s, Pepsi, Amazon, Twitter, Apple, Intel, Chevron, and Exxon Mobil are among the companies that will report quarterly results.

S&P 500 down -2.8% on a weekly basis

For the week, S&P 500 (SPX ) weakened by -2.8%, which marked the S&P 500’s third weekly loss in a row.

Data source: tradingview.com

S&P 500 remains under pressure as investors brace for a more aggressive monetary policy from the Federal Reserve. If the price falls below 4,200 points, the next target could be 4,000 points which represents a strong support level.

DJIA down -1.9% on a weekly basis

The Dow Jones Industrial Average (DJIA) weakened -by 1.9% for the week and closed at 33,811 points.

Data source: tradingview.com

The upside potential is probably limited for the week ahead, and if the price falls below 33,500 points, the next target could be 33,000 points.

Nasdaq Composite down -3.8% on a weekly basis

Nasdaq Composite (COMP) has lost -3.8% on a weekly basis and closed at 12,839 points.

Data source: tradingview.com

This marked Nasdaq’s third weekly loss in a row, and if the price falls below 12,500 points, the next target could be 12,000 points.

Summary

The Dow Jones, the S&P 500, and the Nasdaq ended lower last week as tighter monetary policy signals from the Federal Reserve continue to keep investors in a negative mood. Fed Chair Jerome Powell said on Thursday that a 50-basis-point hike would be “on the table” when the Fed meets in May.

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