While the mood seems to have improved a little at the time of writing, the S&P 500 closed yesterday more than 10% lower than its recent peak at the start of the year, satisfying the criteria for a stock market correction for the first time since 2020. The historical record shows that big falls in the US stock market are a good predictor for the Fed to turn more dovish. But, even if the stock market were to fall further this year, the Fed might not dial back on its plans to tighten, which could keep US equities under pressure.
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