What happened 

The stock market had a rough start to the week Monday -- the S&P 500 fell 0.8% while the Nasdaq Composite was down 1%. Investors were worried about a recession, rising interest rates, and even trade disruptions. 

Some of the stocks hardest hit were related to future consumer spending. MGM Resorts (MGM -1.68%) fell as much as 5.4% in trading, Carnival (CCL -7.09%) was down 9.3%, and Skillz (SKLZ -2.95%) dropped 10% at its low today. The stocks were down 3.9%, 5.9%, and 8.3%, respectively, at the close of trading. 

So what 

JPMorgan CEO Jamie Dimon said today that the U.S. will likely fall into a recession in 2023, just the latest business leader who sees gloom ahead. If there is indeed a recession it's likely the job market will get worse, cutting down on discretionary consumer spending on things like casinos, cruises, and video games. That's why these stocks were hit hard today. 

Another macro headwind today was the Biden administration announcing new export controls for semiconductors and related equipment being sold to China. That sent technology stocks lower, but could heat up trade tensions with China. The U.S. gets most of its electronics from Asia, so an escalation of trade tensions could increase the cost of electronics here and slow the economy as a result. 

Data is a concern this week as well. On Wednesday, the Producer Price Index data will be released, and Thursday is Consumer Price Index day. Big banks also start reporting earnings later in the week along with some consumer goods companies. If investors are worried that earnings will be weak, they may be selling as a result. 

Now what 

We're at the point in the market cycle where data isn't driving big daily moves, but sentiment is. What investors are wondering about right now is where the bottom is for the market. If interest rates continue to rise it's possible that the economy gets significantly worse, the job market suffers, and consumer spending falls off a cliff. 

But there's also a case to be made that interest rate increases have already done their job by slowing the economy and crushing speculative investments. And with commodity prices coming down and inflation starting to slow, it's possible the worst of rate changes are behind us. 

The market seems to go from panic to euphoria every day, but this week starts a different part of the cycle. Earnings will be key this month, and investors will want to watch guidance and commentary about future revenue and earnings. If executives see trouble ahead the market could continue to fall, especially in the consumer space, but I think we'll get better news than many investors expect, and that's why I'm beginning to buy the market's dip this fall.