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US equities are little changed in the European trading session after the markets dropped due to Federal Reserve Chari Powell hinting that interest rates might rise higher for longer.

The pace of interest rate hikes might be lifted higher, depending on the upcoming economic data as investors wait for the Fed commentary today. Therefore any positive economic data might lead to a higher pace of the hiking path which should lead stocks to be pressured while any data which points to a recession may be supportive.

China’s reopening might be around the reasons for the higher spending and demand which lead the US economic data to be more positive than anticipated with rising inflation, while geopolitical tensions should be rated bearish for the stock markets.

The E-mini S&P 500 sharply dropped about 1.5% in Tuesday’s session, leading the market back to target the lower extreme of the Year and Quarter which has served as buying level due to the past slight dovish hints.

The current structure of the intraday session trades rotational in a balanced price range between the day’s value extremes of the VWAP as traders lean toward them to conclude rotational scenarios. The slightly higher dollar and positive volatility of the session might lead market participants to be more likely bearish.

Looking at the CME’s FedWatch tool we can observe the probabilities of the various potential interest rate hikes. We can identify a 70.5% hike towards 5-5.25% as the next FOMC meeting is wafting for 14 days.

With a potentially higher rate hike of about 50 bps, the dollar soared toward new highs and pressured commodities and equities to a bearish bias in the median-term perspective.

Cryptocurrencies such as Bitcoin got to be bearish with the hawkish hints, leading the market lower after a balanced price range that occurred for several days.

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