As investor concerns about a slowdown in economic growth continued to weigh on markets, stocks fell and rates on government bonds surged.
The stock market will struggle for direction until there are clear signs that the Fed is controlling inflation.
The stock market moved lower amid ongoing economic uncertainty, with the S&P 500 losing 1.1% and the Dow Jones Industrial Average falling 8.8%.
The 10-year Treasury note rose to 3% as recession fears continued to affect investor sentiment.
The Atlanta Federal Reserve recently predicted that GDP will grow just 0.9% in the second quarter, down from a previous estimate of 1.3%.
The price of oil hit a 13-week high as demand for U.S. gasoline increased.
Exxon Mobil hit a new all-time high of nearly $105 per share on Wednesday, with analysts expecting further upside due to rising oil and gas prices.
After negative profit outlooks from Credit Suisse and Intel weighed on markets, shares of which fell over 1% and 5%, respectively.
Morgan Stanley analysts lowered their rating on the stock after they warned that inflation will hurt consumers' wallet and demand for cigarettes.
Vital Knowledge founder Adam Crisafulli says investor sentiment is still "precarious" and "on the nervous side" because of the upcoming consumer price index reading on Friday.
According to a recent note from a Wells Fargo strategist, stock market rallies at this point will likely see headwinds and not meaningful follow through until there are clear signs the Fed is succeeding in controlling inflation Positive consumer data could help relieve some growth fears but it could also cause more concern about the Fed's ability to cool demand.
Mark Hackett, Nationwide's chief of investment research, says that the market has become less volatile and less emotional. A more balanced response from investors is encouraging.
According to these experts, the economy may be slowing, but recession fears are overblown.
Exxon Mobil shares hit an all-time high as oil and gas prices keep rising.
What happens to the market during an economic downturn? You may be surprised by the news.
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