Stock Market Update September 20, The Federal Reserve's decision to hold interest rates steady came as no surprise, but market reactions were anything but uneventful. When the FOMC revealed that its members generally anticipated one additional rate hike within 2023, the S&P 500 initially dipped, losing 20 points almost instantly. However, the market found its footing again as Fed Chair Powell commenced his prepared statement. Equities climbed throughout the duration of his comments but began to falter when he transitioned into the Q&A session. It seemed as though investors were banking on further optimistic guidance, and once it became clear that none was forthcoming, sentiment cooled off. Prior to the FOMC statement, market breadth had been notably strong, indicating a more complex set of investor reactions to the Fed's current policy stance.
The Nasdaq indices experienced a more pronounced decline, with their higher volatility factors amplifying the losses. As depicted in the leading graph on page 2, the Nasdaq 100 Index remains above its 100-day moving average. Interestingly, only 47 of its 100 constituent stocks are currently above their respective 100-day moving averages. Significantly, the Nasdaq 100 has breached its ascending support line, which had been intact since the start of 2023. This could be indicative of a shift in market sentiment for the technology-heavy index.
In other asset classes, bonds relinquished their initial advances to close lower, while the dollar showed modest strength. Precious metals ended the day flat, despite having rallied earlier. Mining stocks generally posted gains, bucking the day's trend.
Today's free premium chart below
Join now for a 14-day free trial & gain access to exclusive investment alerts like the one our premium members receive.
Should the U.S. Dollar break its recurring pattern, this could serve as a bullish indicator that we'll be watching daily.
