U.S. stocks gyrate lower after Fed slashes rates by 50 bps
Main U.S. indexes end modestly lower
Utilities down most among S&P 500 sectors; Energy biggest gainer
Dollar edges higher; gold, bitcoin dip; crude off >1%
U.S. 10-Year Treasury yield jumps to ~3.71%
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U.S. STOCKS GYRATE LOWER AFTER FED SLASHES RATES BY 50 BPS
U.S. stocks spiked, whipsawed, turned somersaults and zig-zagged after the U.S. Federal Reserve did exactly what markets expected it to do; it implemented a 50 basis point reduction to the Fed funds target rate.
It was the Fed's first rate cut since the onset of the pandemic, and markets tend to go a little haywire in the wake of high profile Fed decisions.
Investors tried to weigh the elation associated with lower interest rates against the fact that the central bank felt such a cut was necessary, that maybe the Fed knows know something they don't.
"They're cutting when the economy is still showing signs of a fair amount of strength," says Thomas Martin, senior portfolio manager at GLOBALT Investments. "And it's most likely because the inflation fight seems to be in the bag."
So the indexes flashed green then red then green throughout the Q&A, but by the time the dust settled, they ended the session modestly lower.
Economically sensitive transports .DJT and regional banks .KRX were among the day's outperformers.
The Fed's accompanying statement said "the committee has gained greater confidence that inflation is moving sustainably toward" its 2% goal.
In the Q&A session to follow, Powell said "it's time to calibrate our policy" in light of improving inflation and the softening labor market, and stressed that the central bank will remain data sensitive and will make its decisions on a meeting-by-meeting basis.
With that in mind, existing home sales, jobless claims and Philly Fed data is expected early Thursday, with no major economic indicators on the docket for Friday.
Here's your closing snapshot:
(Stephen Culp, Carolina Mandl)
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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:
U.S. STOCKS RALLY, YIELDS SLIP, AFTER FED CUTS RATES 50 BPS - CLICK HERE
GIVEN UNCERTAINTIES, MAYBE BEST TO PLANT IN DIVIDEND GROWERS - CLICK HERE
FORMER FED TRADER SEES 25 BP RATE CUT - CLICK HERE
AMID LAST WEEK'S BIG GAINS, BOFA CLIENTS WERE SMALL NET SELLERS - CLICK HERE
DISTRESSED DEBT PERFORMANCE TO IMPROVE, ALTERNATIVE ASSETS TO CROSS $30 TRLN BY 2030 - PREQIN - CLICK HERE
GETTING THE HOUSE IN ORDER: HOUSING STARTS/PERMITS, MORTGAGE DEMAND - CLICK HERE
WALL STREET STALLS AT STARTING LINE AS INVESTORS HOLD THEIR BREATH FOR FED - CLICK HERE
MOMENTUM OUT FRONT, BUT IS THERE A SHIFT AFOOT? - CLICK HERE
THE UNBEARABLE WRONG-NESS OF FED WATCHING - CLICK HERE
SOFT LANDING TO BENEFIT GROWTH STOCK LAGGARDS - UBS CIO - CLICK HERE
WHAT NEXT AFTER THE FIRST FED CUT? - CLICK HERE
ALL GOOD FOR EURO AREA LIQUIDITY… FOR NOW - CLICK HERE
NOVO WEIGHS, AWAITING THE FED - CLICK HERE
EUROPE BEFORE THE BELL: THE FED, MIDDLE EAST AND UK CPI - CLICK HERE
TRADERS STILL GUESSING IN FINAL FED COUNTDOWN - CLICK HERE
Closing snapshot https://reut.rs/3ZvZa3A
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