Stock Market Update Wednesday September 18, 2024

Stock Market Update Wednesday September 18, 2024 Stocks Whipsaw After Fed’s First Rate Cut Since Pandemic. Stocks experienced volatile trading today following the Federal Reserve's decision to cut interest rates for the first time since the pandemic. Fed Chair Jerome Powell announced a 50 basis point reduction in the benchmark rate, a move driven by easing inflation pressures and a softening labor market. The Fed remains optimistic, signaling that inflation is progressing toward its 2% target and that the risks to employment and inflation objectives appear balanced. The S&P 500 ended the day down 0.29%, despite briefly touching an all-time high earlier in the session. Similarly, the Nasdaq Composite closed 0.31% lower, surrendering a 1% intraday gain. In contrast, the Russell 2000 outperformed, rising 0.25%, while the yield on the U.S. 10-year Treasury note hovered around 3.71%. Among sectors, Energy was the sole gainer, bucking the broader market trend. On the flip side, Utilities and Technology sectors lagged, closing as the worst performers of the day.

Away From Stocks: Treasury markets mirrored the volatility, with two-year yields ticking up two basis points to 3.61%, and the 30-year long bond rising from 3.96% to 4.03%. In commodities, WTI crude oil retreated from lunchtime highs near $71 a barrel, ending the day at $69. Gold briefly spiked to $2,600 an ounce following the FOMC announcement but reversed to $2,554. Meanwhile, Bitcoin, which had flirted with $61,000 post-Fed, slipped back below $60,000. Volatility also spiked, with the VIX closing just above 18, up three-quarters of a point on the day.

Markets have priced in a 50 basis point rate cut. The purple line will be our support level, and the orange line is the resistance.