Following the release of a higher-than-expected inflation report, markets took a big hit from Sept. 13 to Sept. 19.

On Tuesday, the Bureau of Labor Statistics reported that the U.S. consumer price index rose to 8.3%, higher than investors were hoping. The data stifled hopes that the Federal Reserve may ease up on its interest rate hikes and made a soft landing seem less likely.

As a result, all major indexes suffered huge losses. The Dow Jones Industrial Average fell 3.9%, the Nasdaq composite fell 5.2% and the S&P 500 fell 4.3%.

“It increases the probability of recession if the Fed has to move more significantly to address inflation,” Chris Shipley, chief investment strategist at Northern Trust Asset Management, told The Wall Street Journal.

Investors assigned a 34% probability that the Fed will raise rates by a full percentage point at its next meeting on Sept. 21.

After Tuesday marked the worst market performance since June 2020, stocks stabilized and recovered some ground on Wednesday. The Dow gained 0.1%, the Nasdaq gained 0.7% and the S&P 500 gained 0.3%. Energy stocks led the market in gains as Brent crude rose 1% after falling the day before.

Markets declined from Thursday to Friday amid a potential freight labor strike and unfavorable reports from major corporations.

Anticipating rate hikes and a potential recession, Goldman Sachs Group Inc. was reportedly preparing to cut jobs.

Meanwhile, FedEx Corp. announced that it was closing several of its local and corporate offices due to a declining demand. The news led to a 21% decline in the company’s share price on Friday.

The week ended with the Dow down 4.1%, Nasdaq down 5.5% and S&P 500 down 4.8%.

Considering investors’ abrupt response to the most recent index data, the Fed’s next interest rate decision seems like a foregone conclusion.

“It’s clear that they are not going to pivot,” Hani Redha, portfolio manager at PineBridge Investments, told The Wall Street Journal. “That ship has sailed.”

On Monday, stocks ended in the green after opening with losses. The trading day ended with the Dow gaining 0.6%, Nasdaq climbing 0.8% and S&P 500 gaining 0.7%.

In light of the Fed meeting and in anticipation of potentially larger-than-expected hikes, investors sold government bonds, pushing yields to their highest level in decades. Yields on 10-year Treasurys rose to 3.489% — the highest level since 2011 — while two-year Treasurys reached a 15-year peak at 3.946%.

“We’re afraid the Fed could surprise us with another jumbo hike,” Florian Ielpo, head of macro at Lombard Odier Investment Managers, told Morningstar. “We very well could be at the entry point of a U.S. recession.”

With conditions remaining volatile ahead of the next Fed meeting, investors will look to the Fed’s decision and gauge the aggressiveness of its plans on bringing down inflation.