what we want we want financial conditions to ratchet higher we want to see this process play out. 50, 50, 50 is less likely to break things in their mind in '94, they went 75 but after they had been several hikes in >> we'll see where it all goes next week. have a great weekend that's mike santoli. "fast money" is now. right now on fast, markets plunging to end the week closing back in on the lows of the year inflation at 40-year highs sentiment at record lows is there more pain ahead and how can you brace yourself for this volatility plus, the most important move in the market while one of our traders says the action in gold today could signal some big trouble ahead, and believe it or not, we were able to find just a couple of names that managed to eke out gains today. we'll tell you what they were and bring you those trades i'm frank holland in for melissa lee. this is "fast money.

on the desk, tim, brian kelly, steve grasso and pete najarian we start with that deep sea of red on wall street the s&p plunging nearly 3%, closing back opinwithin a perceo bear market territory. amazon down more than 5.5% all manl major indexes within a whisper of their lows. the two-year treasury yield surging above the 3% mark since only back in 2008. the reason for all this turmoil, inflation clocking in higher than expected in may the jump so jarring that not one, but two, i'm channelling my inner lebron james they're calling for a 75 point basis hike next week so with a more aggressive fed and continually volatile market,

how should investors set up? tim, you just started. i'm going to go to you >> it's a somber day, but exciting day to have you on fast awesome to have you here >> this is not my first time >> first time in that chair. doing that thing it's awesome great to have you. and it's a day when, look, i know equities are front and center and we have some levels on the s&p certainly a closing level back to those lows didn't get to the intraday low of i think 3811, but i think the most important dynamic was not just the inflation number. you had a confidence number that was not just below number, but the lowest on record so you know, as you led in, talked about not one, but possibly three 75s, the feds never hiked with consumer confidence below 60 let alone at 50 if you think about the dynamics around the numbers today, what was probably most alarming is the services side of the inflation story, the one that i

don't even think we have had yet and so then you get the dynamics around that goldman downgrade of netflix, maybe we'll talk more about it, maybe we don't now we're talking about consumer stocks or at least consumer spending in the context of higher inflation what are they going to give up that was part of that downgrade. not sure i agree with that, but that's the dynamic that comes on a day like today i think we have some levels that are starting to point to >> i'm sorry >> it was just terrible price action today and to tim's point about michigan sentiment, one more thing on that you also have longer term inflation expectations increased to 3.3% which is what the fed will look at to see if expectexpeck takss unanchored it means the fed's going to have to raise rates a heck of a lot more i'd do 75 basis points on sunday night and shock the market >> that's what the market probably thought today

so they were pricing in a 75 basis point hike for next week figuring they were going to get out of it, but the fed pretty much all but took off 75 as a hike so i think the market had to readjust, but i think the r word is creeping in i've been mr. negative mr. recession. first quarter was negative growth second quarter's tracking negative growth. the textbook definition is two quarters of negative growth. the only thing we don't have is a rise in unemployment rate. so that's still shows that people have some green in the pocket >> got a pessimist right here. a lot of troephies, not a lot o winning today. >> what i think it comes down to, guys, just the absolute inverse relationship that we've had with the ten-year and now you can throw in the two-year. take a look at the velocity of

the move from the two-year where it was under 250 at the end of may and here we are under three. when we see that, we see the algorithmic selling when we see the two-year over three. the selling just comes absolutely incredible. we had it yesterday late in the day. we had it all day today. i think it's something we got to keep an eye on we're all talking about the cpi. we know those numbers backwards and forwards it's unbelievable. but at the same time, it shouldn't be something unexpected it should have been exactly expected we know when we look at nat gas, wheat, corn, we look at all these variables. we should know that this was going to be a pretty awful number and it certainly lived up to that, frank so i think it's one of those things where i'm surprised where volatility is. we priced in the weekend, but we are well over 29 on the vix. hold back towards 28 it's going to be an interesting week next week we had volume finally return in the derivatives mark

two days ago, over 53 million. so we did see volume show up and that might be a good sign. >> i'm going to get back to h rate hike issue. we just flashed it a second ago. barclays and jeffries forecasting a 75 point hike. if we would have got to that 8.3%, would we have avoided a selloff? doesn't seem to be that big of a difference >> i just think on the headline number and a lot of that rally we had on the s&p into the may lows where we started selling off early in the week was that inflation wasn't so bad. these headline numbers, even if you think about where the comps with, conceivably, you have a chance for this to look like peak inflation steve's been saying something about that i just, talking about the interest rate dynamic and pete brought this up. i don't think we can underestimate the fact the two-year note is at a level it hasn't been since the pre gfc.

october 2007 these are signs of extraordinary moves and dislocation and that to me is what concerns me. we had an ecb meeting today and i know we don't really care about the ecb. if you look at where fed fund futures are and the shadow rate is and inflation rate, that differential, the fed's never been this far behind ecb's not even in the stratosphere and the bank of japan is on mars if you look at dollar yen, it's going to 150 and these are things that are not great for equities i think today was an equity story. but what happened in fixed income, in the treasury bond market and the dollar back to 20-year highs concerns me. >> it's more than just cpi, too. it's this combo of a weak consumer consumer sentiment at lows we haven't seen in decades. plus high inflation. so now you have a federal reserve and frankly, every central bank except for the japanese central bank, are going to hike rates into a recession

and we'll be lucky if all we get is a hard landing. that's what the market's pricing in right now >> steve, last word. >> yeah, so tim talked about some levels in the stock market. 3810 is the level you want to watch. but when i look back to february 2020, the stock market was at 3400 3350 i think we might have to test it >> really? >> that's where mike wilson is probably pulling out he does it on a fundamental analysis february 24. so if we go down to that level, what's the only thing that's changed from that time to now are rates. we're moving into a ramping as bk said. so maybe you break that level, but i think that has to be the next level to watch. >> great segue let's dive into the key -- >> there's a rundown >> first time for anything mark newton, mark, great having you on you say 3810 just like steve key level for the s&p.

280 for the qqq nasdaq etf that's around their may lows do you see them holding at those levels >> hey, frank. thanks for having me i do think there's an above average chance these can hold for a couple of different reasons. one is that this entire selloff in the last few days has been driven by the dollar and yields moving back up now both are near critical resistance and i think they can hold in the fed meeting. my own cycles and projections show that yields can start to back off so i like buying tlt. s&p for now, the spx, that's a key level. you know, i do think that probably can hold. look, technology has done better in the last month. if you look at equal weighted technology and strip out the faang, invesco is positive versus xlp, it's been down but technology as a broader group has been better than one

might expect >> mark, appreciate the insight. technical analysis pete, to you do you agree with this do you believe there's merit there? >> you know, the way things feel now, i don't know that that's possible as a matter of fact, when i look at what people are buying in terms of the puts getting bought in the major etfs of late, that's been interesting. on top of that, how about what was going on the other day with the volatility index people were buying the bix calls. the 50 strike calls. 95,000 of those. going out to july. so gives me and idea that people are expecting something that's going to be big and maybe bigger than those levels. could we go under those levels we could not saying we will, but there's a possibility. >> steve, usual saying 3450 is the level to watch on the s&p? >> 3350. could be a smidge lower, but if

we have that, you're going to see panic. the problem is, if it's a different rate environment then that doesn't stand i look to the benchmark of feb 2020 before we fall off a cliff. >> i think we're pricing in interest rates and we talked about the move in interest rates, but haven't really yet priced in demand we had this conversation oon this desk for two months sorry, i'm waiting for apple to give me a demand at least some sense that it's, you're getting a pullback and i think that's part of the story. we know that rates have moved higher haven't heard the street pull back their target. still talking about 78% earnings growth i think you have a case where we have some dynamic where we haven't felt the dynamic >> the qt, and we talked about this qt just started. you've had a couple of things going on you can't call a substantive bottom until we see how qt, what

that effect is in the rate environment. >> good point. we have a market flash for you on tesla shares moving higher up just about a percent in the afterhours after the ev maker provides details on its planned stock split. they said they would seek a three for one split and that la larry ellison is leaving the board. over to you, bk. let's trade it >> i laugh because stocks go up on a split there is no change in the fundamentals the only thing, buy more shares. it's absurd the stock is up on a split, but it happens every time so as our friend dan would say, have at it but in terms of tesla, this is not an environment that tesla's going to do very well in and i think you need to watch when people start leaving your board, that can be a canary in the coal mine >> it can pete, i saw you giggling

got some thoughts on this one? >> i hear that conversation all the time and i'm not saying they're wrong because fundamentally, they are right. but you have to understand that now all of a sudden, you've got more liquidity access from people so there's a different dynamic going with those stocks. of course, the stock has not changed in any way other than that, but that is a big factor because you you've got more participants, liquidity and more volatility we've seen that happen with amazon and by the way, they usually, over the first year, they outperform significantly over the s&p after a big split so that's something just to keep your eyes or mind on as we watch this all happen because this has been very, very consistent and it's happened for a long time. >> steve, you bought amazon on the split. are you bullish on this one? >> this is three for one still $235 or whatever the number is. still expensive for a retail investor so if you really want to look at

something, you look at google. it's going to split and they're 20 for one as well so if you want to see some sort of a run up, maybe that will coincide with the market rebounding from the levels it's at right now i'm still long amazon. this is actually split adjusted where i bought it. >> there we go coming up, even amid today's wreckage on wall street, we found some green chutes out there. what worked and the trades ahead. but first, it may glitter, but is gold actually move? one trader is calling the move higher straight up scary atnd much more when "fast money" returns but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description.

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welcome back to fast money here's another look at where we ended the day on wall street markets closing at the lows of the day as inflation hits a 40-year high and consumer sentiment plummets all those fears sending goal higher, rallying more than 1% today. brian kelly, you're calling this move scary >> well, it's weird, right so if i set up a scenario and say listen, there's going to be a day that you have a strong dollar and you have higher rates. i would say you know what,

gold's going to be lower and as much as higher rates were today and as strong as the dollar was today, i would have told you gold should have been down 100 points, but it wasn't. so you have to pay attention what's the interpretation of that why do you buy gold? as an inflation hedge. because you think central banks may not necessarily have control over things. so my interpretation of why it went up today is the investors are saying central banks do not have control on inflation. it's going to get worse. going to go higher and i need a hedge against it and you have to pay attention to what the gold market is telling you. >> bk, why is that so scary? >> why because they're going to be raising rates because they don't have control over inflation. so they've got to raise rates more than the market thinks, which means you're going to have a much harder landing than what the market is pricing in to that >> i think gold has been perplexing because we have had this opportunity if gold is the ultimate inflation hedge because it's an asset that doesn't have a yield

attached to it there's seemingly unlimited supply today, gold takes off because it's very clear, a lot of inflation dynamics, whether they peaked or not. i don't think so we heard about the services side of the inflation story you look at gold, also, you get back to the high in july of 2021 that we hit in the markets and i actually think gold is probably going to breakthrough those 1875 levels in the next couple of months to me, diversification and i'll bring back some of these currency market where is i don't think that really the boj, bank of japan was out there over the last couple of days trying to say we're concerned about the move in our currency, meanwhile they're still targeting 25 basis points on the long end of their yield curve which is so far out of space the environment for gold and precious metal silver has underperformed. two etfs where you can buy gold and silver, it favors owning silver >> pete, last word before we go.

milk and cheese. >> i would just say this no, but i would agree with the guys and quite honestly, we've seen a lot of option paper in gld for a while now. hasn't performed yet, but maybe it's time. as an inflation hedge or whatever you want to call it what you're looking at now, i think people look at it as anal t terntive and when they can't see anything that makes sense, they go to gld. for that reason, you'll start to see those move to the upside >> there we go coming up in today's sea of red, we found some sweet gains. that's a clue. we'll reveal which stock was able to snack on a tasty rally today. then later on options action, one trader expects caterpillar to inch lower. we'll dig into that trade ahead. and throughout june, we're celebrating pride month. here's cnbc's segment producer, brandon gomez. >> change requires persistence after i came out to friend, i

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you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. welcome back to "fast money. they were just a few parts of the market that were able to pull off some gains. names like hershey, kellogg and

conagra. miners also eking out gains. as the volatility rages on, are these names going to be ports in the storm? bk, over to you. >> it's hard in a market where almost everything goes down to say there's any type of safety right? however, with these stocks, if you can get them at the right price, they come with a high dividend and as long as they have pricing power, which many of these do, then you should be okay but just to be clear, that doesn't guarantee that they're not going to go down with the rest of the market you get some big downdrafts, these things are going to do down as well, but probably less than others. >> yeah. relative basis, but if you look at that list, i think duhmon was at $87 recently. hershey was at 229 on may 16th on may 19th, it was at 201 so these things have gotten slammed. these are really just bounces off an oversold, the market gets oversold, but sometimes you can become more oversold

so to bk's point, maybe a little bit of safety, but that dividend gets eaten up on one day >> energy, this is the case where there was a bit of a pullback energy stocks pulled back today. these are opportunities to me to be adding exposure to one, companies that are going to have a heavier weighting in the s&p even by the math of the rest of the weightings of these companies. smaller as things move lower, but i talked about the move from 2.5 to 4.5 probably six by the end of the summer but the structural dynamic around energy, that continues to move positively. healthcare, no question these stocks are going to trade eck pensive. they should. the balance sheets are there they will be very defensive. >> pete, safety in staples >> i would say that anybody looking for safety, they're looking in the wrong places right now. i know that sounds crazy, but to the point of all these guys, quite honestly, they can look like a safety just because this is the day that they actually

stay close to positive or in positive territory, but the reality is they're getting beat up, too, so i don't think there's any safe place you can go no place you're going to feel any true security so i think you have to be disciplined on where you're going to put that money when you're putting it into the markets. i don't think you can say you know what, i'm going to go into staples for this reason. i don't think in this market right now, people are looking that way they're looking because they're so confused by the market. >> time for final trade. pete, might as well go with you. >> all right tim mentioned energy one more suncor i think it's going up. >> tim >> gdx not only you have the gold factor, but these are miners that have battered for years now relative to the last rally in gold 20 years ago. >> steve >> i see what you did there.

noc. my final trade last night. one of the green things on the screen today noc. >> bk, final word. >> i mentioned the staples may or may not be that safe, but i have one that's a longer term. cpb. has a good dividend. relatively good performance. >> strong pricing power in the last earnings, too that does it for us on "fast money. do not go anywhere options action is up next. stay with us

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it is friday, that means it's time for options action i'm frank holland filling in for melissa lee. joining me tonight, mike, tony, and a special guest appearance by bonawyn we're wrapping up a rough day on wall street. stocks plummeting after hotter than expected cpi data nasdaq falling more than 3.5%. each index closing out its worst week since january mike, start with you >> it's pretty grim. i think that much is clear and i think one of the things we have to take a look at is you know, what's the