{"id":9783,"date":"2024-09-19T12:02:23","date_gmt":"2024-09-19T12:02:23","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/09\/19\/stock-market-today-fed-cuts-rates-and-market-makes-last-minute-u-turn\/"},"modified":"2024-09-19T12:02:23","modified_gmt":"2024-09-19T12:02:23","slug":"stock-market-today-fed-cuts-rates-and-market-makes-last-minute-u-turn","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/09\/19\/stock-market-today-fed-cuts-rates-and-market-makes-last-minute-u-turn\/","title":{"rendered":"Stock Market Today: Fed Cuts Rates and Market Makes Last Minute U-Turn"},"content":{"rendered":"
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The stock market received what it expected from the Federal Reserve\u2014a 50 basis point interest rate cut. Stocks rose initially, but the broader stock indexes\u2014Dow Jones Industrial Average<\/strong> ($INDU), S&P 500<\/strong> ($SPX), and Nasdaq Composite<\/strong> ($COMPQ)\u2014closed lower. Small- and mid-cap indexes followed the broader indexes and closed slightly higher, with the S&P 600 Small Cap Index<\/strong> ($SML) rising by 0.09%. All S&P sectors except Energy closed lower.<\/p>\n

It was a case of \u201cbuy the rumor, sell the news\u201d after the Fed\u2019s announcement. The stock market rose in anticipation of an interest rate cut, so a selloff after the announcement shouldn\u2019t be a big surprise. It\u2019s almost as if the anticipation fizzled off.<\/p>\n

The selloff wasn\u2019t too damaging, though. Equities are still holding up. The S&P 500 hit a record in Wednesday\u2019s trading, but closed below its blue dashed trendline (see chart below<\/a>).<\/p>\n<\/p>\n

CHART 1. S&P 500 CONTINUES TO BATTLE AGAINST RESISTANCE. After hitting an all-time high, the S&P 500 fell and closed below its downward-sloping trendline. The stochastic oscillator in the lower panel is starting to turn lower.<\/span>Chart source: StockCharts.com. For educational purposes.<\/span><\/em><\/p>\n

The stochastic oscillator<\/a> is starting to turn lower, but is still above the 70 level. The S&P 500 is trading above its 21-day exponential moving average<\/a>, which is still sloping higher. There still needs to be a series of higher highs to break the gentle downward-sloping trendline. Remember, it\u2019s still September, and the latter part of the month tends to be weaker than the first half.<\/p>\n

US Economy in Good Shape<\/h2>\n

Fed Chair Jerome Powell remarked that the economy is holding up well and heading toward a soft landing. His comments shifted from inflation, which continues to decline, to the labor market. The committee will closely watch the labor market, which is at 4.2% unemployment. That\u2019s close to full employment.<\/p>\n

Investors can expect another 50 basis point rate cut this year and an additional 100 basis points in 2025. Chairman Powell pointed out that investors shouldn\u2019t expect 50 basis point cuts at the next meeting. The pace may be slower, going forward.<\/p>\n

Earlier in the day on Wednesday, housing data painted a positive picture of the housing market. Housing starts and building permits rise, probably because of a fall in mortgage rates.<\/p>\n

A strengthening housing market, falling inflation, and a stabilizing labor market point to economic stability.<\/p>\n

Bonds Pull Back<\/h2>\n

Treasury yields rose after the rate cut decision, resulting in falling bond prices. It\u2019s worth watching the bond market. The daily chart<\/a> of the iShares 20+ Year Treasury Bond ETF<\/strong> (TLT) shows that Wednesday\u2019s selloff was sizable. If TLT falls further, watch the upward-sloping trendline (blue dashed line) as a potential support level.<\/p>\n<\/p>\n

CHART 2. BOND PRICES ARE STILL IN AN UPTREND. Watch TLT\u2019s price action at the blue trendline. This could be a viable support level at which the ETF could bounce off and move higher.<\/span>Chart source: StockCharts.com. For educational purposes.<\/span><\/em><\/p>\n

Ideally, when interest rates fall, bond prices should go up. If TLT bounces off the trendline and moves higher, it would be an opportunity to accumulate more positions in TLT.<\/p>\n

Closing Position<\/h2>\n

Now that the stock market has received what it wanted, it\u2019s taking a breather. Allow some time for the news to digest, which could take a couple of weeks, and look for signs of a market bottom. Toward the last hour of trading, there was much selling across the board. Let\u2019s see if the selling continues tomorrow or abates.<\/p>\n<\/p>\n

Disclaimer:<\/em><\/strong> This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The stock market received what it expected from the Federal Reserve\u2014a 50 basis point interest rate cut. Stocks rose initially, but the broader stock indexes\u2014Dow Jones Industrial Average ($INDU), S&P 500 ($SPX), and Nasdaq Composite ($COMPQ)\u2014closed lower. Small- and mid-cap indexes followed the broader indexes and closed slightly higher, with the S&P 600 Small Cap […]<\/p>\n","protected":false},"author":0,"featured_media":9784,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-9783","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=9783"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9783\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/9784"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=9783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=9783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=9783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}