The S&P 500 is on track for its worst month since March 2020, when the COVID crisis exploded across the U.S.

Why it matters: With inflation already an uncomfortable fact, a market rout will add to the cranky mood of voters and consumers.

By the numbers: Through the close of trading Tuesday ...

• The S&P 500 was down 7.8% in April, which would be the worst showing since March 2020. (It shed 2.8% Tuesday alone.)
• The Nasdaq Composite was down 12.2%. That's on track to be the biggest monthly drop for the tech-heavy index since October 2008, during the financial crisis.
• The Russell 2000 index of smaller stocks — typically tied to the shorter-term outlook for the U.S. economy — is down 8.7%.

The big picture: There's not a lot of reason to feel bullish.

• Inflation is high, which means the Fed seems likely to keep hiking interest rates over the next few months — typically a negative for stocks.
• Even if the rate of inflation may be peaking, there's no sign it'll slow that much. Housing prices will continue pushing the key shelter component up. Energy costs are still being driven by the war in Ukraine. And Asian supply chains also seem to be breaking again, as China locks down to fight another COVID outbreak.
• What's more, the lockdowns in the world's second-largest economy are themselves a growing risk for global growth, adding a new worry for investors.

China's government is showing no signs of backing down from its so-called zero COVID policy, which calls for sharp curtailments of economic activity in areas with outbreaks.

• "The list of lockdown cities is still becoming longer," J.P.Morgan economists covering China wrote yesterday in a research note.

What they're saying: "Markets appear particularly focused on the risk of a growth shock, owing to [central bank] tightening, the Russia-Ukraine conflict, and China lockdowns," wrote analysts at BofA Securities.

• Yes, but: Optimists can point out that U.S. corporations have been doing just fine. About 80% of those in the S&P 500 who reported first-quarter earnings — roughly 135 — beat analyst expectations, and commentary from executives has generally sounded upbeat.

The bottom line: Those profits, however, were likely priced in over the last year. Remember, markets are forward-looking and the S&P was up a sumptuous 27% in 2021.

• From here, the outlooks for earnings and the economy are suddenly looking a lot cloudier. Investors are beating a hasty retreat in case it's about to get worse.