Markets rebound can be self-fulfilling. There are too many shorts who are now panic-buying call options on the S&P 500 to hedge themselves. As such, S&P 500 volatility skew is at extreme levels (i.e calls buying is extreme vs. puts buying).

Stocks were down for a 3rd week in a row on the back of turmoil in UK financial markets and signs that the Fed still has much more to tighten.

Global equities recorded a second week of heavy losses after the Fed revealed that they expected official short-term interest rates to continue going sharply higher over the next several months.

Stocks hit its lowest point on an intraday basis since mid-July on Friday as inflation fears intensified. Growth stocks fared worst, with the Nasdaq Composite falling nearly 5.5%.

The S&P 500 gained 3.6% over holiday-shortened week, lifting $SPX above 50 days & 100 days moving averages, triggering short coverings.

In a week of mostly light summer trading, stocks pulled back sharply as investors became less optimistic that the Fed will be able to tame inflation without causing a significant economic slowdown.

US equity markets gave back a portion of the previous week’s strong gains after Saint Louis Fed’s President James Bullard appeared to dampen hopes that inflationary pressures had peaked.

US equities rallied after data showed signs that US consumer prices, while still elevated, had started to slow, supporting the view that inflation might have peaked.

US stocks posted solid gains despite another 75-basis-point rate hike from the Fed and news that the US economy contracted at a 0.9% annual rate in the second quarter.

Investors appeared to welcome signs of a slowing economy and fading inflationary pressures. Indeed, disappointing US Macro data (PMIs, initial jobless claims, Housing data, Philly Fed leading indicators) drove US rate hikes expectations lower, pushing bond yields and the dollar downward and main stocks indices higher.