Investing.com -- Stocks sank after the Federal Reserve said more interest rate increases were possible this year even though it was going to wait out June keeping rates steady.
It's the Fed's first pause in over a year, but the central bank is projecting two further hikes in the pipeline. The Fed increased its benchmark rate forecast to a terminal rate, or peak rate, of 5.6%. That's much higher than March's forecast for 5.1% and above expectations.
Despite the outlook, Chair Jerome Powell said the future rate decisions would be made on a meeting by meeting basis. No decision had been made yet about the July meeting, he added.
Still, futures traders see a greater than 50% probability that the Fed will raise rates another quarter of a percentage point when it meets in July.
That would be despite cooler-than-expected data on consumer and producer prices this week. Data out later this week includes unemployment claims for last week and retail sales.
Here are three things that could affect markets tomorrow:
1. Retail sales
Retail sales data for May is expected out at 8:30 ET (12:30 GMT). Analysts are expecting year-over-year gains of 2.2% and a monthly downtick of 0.1%.
2. Adobe earnings
Adobe Systems Incorporated (NASDAQ:ADBE) is expected to report earnings of $3.79 on revenue of $4.77 billion.
3. Kroger earnings
Grocery chain Kroger Company (NYSE:KR) is expected to report earnings of $1.44 on revenue of $45.2B.