The market saw a very nice bounce following comments from Fed Governor Waller that supports 75bps rate.  But he could vote for a more aggressive action if coming economic data continues to point to further inflation risk.

Waller is the first Fed policy marker to express openness to an increase larger than 75 basis points at the July meeting. This openness is consistent with where the markets have been heading following the ugly inflation numbers.

Technology has the slimmest losses of the 11 S&P 500 sectors, with semis showing mixed price action. Qualcomm (QCOM) and Analog Devices (ADI) are both up in sympathy with Taiwan Semi (TSM), which beat earnings and issued guidance above consensus.

The U.S. dollar index (UDSXY) pared gains, but its move higher continues, hitting a 19-year high today. This move is good for import purchasing power. However, it is bad for U.S. exports and multinational companies with a lot of international revenue.

Market breadth is awful and decidedly negative.

Inflation has taken a bite out of stocks and bond markets. It might not be over yet, as investors await Q2 earnings data and the Fed’s next move on July 28, 2022.