The S&P 500 could fall 20% by midyear as Powell's hawkish testimony sets the stage for higher rates than markets were expecting, JPMorgan says

• The S&P 500 could fall as far as 3,200, according to technical analysis from JPMorgan.
• That would represent a decline of 20% from current levels.
• The gloomy outlook comes after Fed Chair Jerome Powell said bigger rate hikes are possible.

In light of hawkish comments from Federal Reserve Chairman Jerome Powell, the S&P 500 could fall as low as 3,200, according to technical analysis from JPMorgan.

That represents 20% downside from current levels, and comes as the S&P is nearing a major threshold at around 3,900, which JPMorgan called a level of "critical confluence" given that the 50-, 100-and 200-day averages are converging roughly around there.