Risk assets bounced back through the holiday-shortened week last week.

After a tumultuous beginning of June for markets, investors hoping that a Federal Reserve (Fed) meeting and rate hike would calm markets were sorely disappointed last week.

The latest year-over-year Consumer Price Index (CPI) figures, a commonly used approximation of inflation, were released on Friday and the numbers came in higher than expected (see graph below).

Risk assets slid lower last week as major US retailers Target and Walmart both missed earnings estimates.

Despite a big bounce on Friday, risk assets had another difficult week last week. The latest Consumer Price Index year-over-year increase was released on Wednesday.

It was another busy, and volatile, week in the markets. The US Federal Reserve (Fed) moved forward with the much anticipated 50-bps interest rate hike on Wednesday and equity markets immediately rallied on the news.

Both equity and fixed income markets continued their downward slide last week. The war in Ukraine continues to drag on, Covid-19 lockdowns in China persist, and Federal Reserve President Powell indicated that a 50-bps interest rate increase is “on the table” at the next meeting.

Last week the equity markets retreated, in general, during the holiday-shortened week. Inflation, the conflict in Ukraine, and the resurgence of Covid-19 all remain issues that are weighing on investors.

After rallying in March, equity markets retreated last week. Investors expressed concern over the Federal Reserve (Fed) meeting minutes released on Wednesday, which communicated plans to reduce their balance sheet (alongside raising interest rates throughout the year).

Risk assets, in general, advanced last week, building upon a big bounce upward the week prior. The S&P 500, a proxy for US large-cap stocks, gained 1.8 percent for the week and the MSCI ACWI, a proxy for global large-cap stocks, advanced 1.2 percent.