While we started the trading day somewhat flattish, but soon after the open began a steady march downward. Indices closed the day at or near session lows, with all 11 sectors of the S&P 500 in the red for the day. The Dow closed -638 points, or -1.94% — and that was the best performer of the four major indices.

The S&P dropped -2.38%, the Nasdaq gave up -332 points, -2.75%, and the small-cap Russell 2000 gave back 2/3 of its gains for the past week of trading, -2.02%. Market activity showed 10x declining volume than advancing — it was a lousy trading day, overall.

Early today, we saw the European Central Bank (ECB) set new monetary policy, indicating a 25 basis-point (bps) raise is coming at the bank’s July meeting. Beyond that, the ECB also sees a September raise, albeit for an unnamed amount.

Recently, Eurozone Consumer Price Index (CPI) were released for May, with an +8.1% headline number reminiscent of what we’d been seeing in the U.S. of late. Growth forecasts from the ECB have come down from their last reckoning: +2.8% CPI growth is expected for this year, +2.1% next year. These figures are down to +2.1% and +2.8%, respectively.

Here at home, we’ll be getting our May CPI data Friday morning, with the month-over-month headline expected to come in at +0.7% and year over year, +8.2%, down a tick from +8.3% in April. Obviously, food and energy costs haven’t done much but go up aggressively in the past month, but if we can somehow get a core year-over-year read beneath +5.9%, where it is currently projected, that may represent a sort of (small) victory.

We likened this week’s minor bullishness to taking a lead off first base prior to Friday’s CPI “pitch.” Well, this analogy still holds if we consider today’s -2% skid is akin to sliding back to tag the bag ahead of the CPI numbers. The wind-up is imminent…

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