Investors have been waiting all year long for the Federal Reserve to pause its aggressive campaign of hiking interest rates. While the Fed has slowed, it hasn't yet stopped, despite the fact that a banking crisis broke out in March.

After the March jobs report Friday, which came in around expectations, investors seem to think that another quarter-point hike is likely in store for the Fed's May meeting. Now, the only likely way the Fed may pause in May is if key inflation data that's due out tomorrow comes in favorably. That's why tomorrow is an important day for the stock market.

In 2022, some of the highest inflation in more than 40 years struck the economy. The Fed found itself behind the eight ball and began hiking interest rates quickly. Rising interest rates tend to make riskier assets like stocks less appealing, especially on the growth side, because they reduce the future value of cash flow and make safer assets yield more. The benchmark S&P 500 index fell roughly 20% last year.

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Source Fool.com