European stock indices are also in the red following a slump in the industrial sector, with the Stoxx index down around 1%, a fourth consecutive day of losses. UK shares weakened after the Bank of England raised its key interest rate more than economists anticipated, stoking fears that the economy could plunge into a recession.

The regulator boosted the base rate by 50 basis points to 5%, doing its best to curb inflation, which is lingering at 8.7%, higher than economists expected. Market participants now believe the Bank of England's benchmark rate will exceed 6% by year's end.

Central banks' battle against inflation is far from over. Rates will likely continue to rise, contradicting market participants' hopes of a nearing peak. This prompted investors to reconsider their optimism triggered by the Fed's rate freeze last week, piling more pressure in the stock market.

Recession risks are now higher than before. It appears that rates will remain at their peaks for a longer period than initially forecasted, but for some reason, the risk assets market seems to be turning a blind eye to this. Talks about a hard landing in the US have also resumed due to prospects of tighter policy, leading to a 1% yield curve inversion for Treasury bonds, the first since March this year.

During his speech yesterday, Powell stressed the need to tame inflation, stating that two more rate hikes this year would be a "pretty good option."

Earlier, the Central Bank of Norway raised its key deposit rate by 50 basis points to 3.75%, marking the 11th base rate hike since September 2021.

Meanwhile, the Turkish lira fell to a record low against the dollar after the central bank revised its exchange rate.

As for the S&P 500 index, demand for the trading instrument is decreasing. Buyers have a chance to maintain the upward trend but bulls should settle the price at $4,383 and $4,416, pushing the index higher to $4,447. Bulls also should protect $4,488, which would strengthen the bull market. If the index declines due to reduced risk appetite, bulls should defend $4,350. Breaking this level, the trading instrument may plummet to $4,320 and $4,290.