Stocks closed lower on Friday, and again for the week.

The Dow, which has still eluded an official bear market call, dipped below the -20% threshold intraday before closing down -19.6% from their all-time high close. But they traded below their June lows, and closed below their June low close on Friday.

The S&P remains in bear market territory. They are down -23% from their all-time high close. They almost exited their bear market back in August, but just missed doing so. Their June lows remain intact, and so does their June low close. Although, that's of little consolation since we're talking about a difference of a fraction of a percent. Nonetheless, for those interested in the technical aspect, those details are important to know.

On that note, you'll recall the Nasdaq and the Russell 2000 had exited their bear market in the first part of August, and technically entered a new bull market when they finished 20% above their bear market low close. From their lowest close, they rebounded as much as 23.3% and 22.5% respectively. Since then, however, they've both fallen back down. As strange as it sounds, they are technically still in their new bull market as the Nasdaq is 'only' down -17.2% from their recent bull market high close, and the Russell is 'only' down -16.9% from their recent bull market high close. But from their all-time high closes, they are down in total by -32.3% and -31.2%. As I said, strange. And for those keeping track, they both stayed above their June lows and their June low closes.

Last week's move by the Fed to raise rates by another 75 basis points, combined with a higher terminal rate forecast of 4.6% by early next year (previously expected to be 4.0%), weighed on stocks.

The higher target rate and the accelerated timeline caught the market by surprise. But the previous week's hotter than expected CPI and PPI reports, which showed inflation still hovering near 40-year highs, has further emboldened the Fed to keep raising rates until inflation is under control. And that means having the confidence that it's heading back down to 2%.

By year's end, the Fed expects the Fed Funds rate to be at 4.4%. In order to reach that level in the next 3 months (the midpoint is currently at 3.13%), it will require another 1.25% between the next two Fed meetings in November and December. Absent an intra-meeting rate hike, that would mean another 75 bps at one of the meetings, and 50 bps at the other.

In other news, the PMI Composite report saw the Composite Index rise to 49.3 vs. last month's 44.6 and views for 47.0. The Manufacturing Index increased to 51.8 vs. last month's 51.5 and views for 51.3. And the Services Index rose to 49.2 vs. last month's 43.7 and views for 45.0.

We'll get another round of economic reports to sift thru this week.

But all eyes will be on June's lows to see if they can hold.

See you tomorrow,