By Markus Heitkoetter
￼We typically have a quiet morning on Fed days. With traders cautious ahead of a Fed Statement, it’s normal to have slow or nervous markets.
But not today!
The “quiet” morning lasted approximately 30 minutes. Then stocks actually rallied ahead of today’s statement.
Today’s rally then came to a screeching halt at 2pm ET when stocks tanked. In just 15 minutes after today’s statement, the E-Mini S&P dropped over 1% and entered into negative territory for the day.
But after finding support, stocks spent the last 90 minutes of the day marching higher. The move erased the initial losses, and the major indices finished the day 1.0%+ gains.
The S&P closed 1.2% higher. Up 24.5 points, the S&P ended the day at 2090.35. With the highest close in over 2 months, today’s move brought the S&P within 41 points of its record close.
The DOW finished the day with a 1.1% gain. Adding 198 points, the DOW ended at 17779.52.
The NASDAQ finished 1.3% higher. With a 65.5 point gain, the NASDAQ closed at 5095.69. Apple Inc (AAPL) helped the NASDAQ lead the major indices with a 4.1% gain in respsone to better than expected earnings.
Here are the highlights from the day:
The Fed left rates unchanged (as expected). But also left a rate hike in December on the table (a bit of a surprise). Before today’s FOMC Statement, Fed Funds Futures were showing a 35% probability that the Fed would raise rates in December, now the probability is at 49%.
The U.S. dollar was up after today’s Fed news. The US Dollar Index (DX) finished 0.8% higher, and ended the session at its highest level in over 2 months.
Gold (GC) experienced a wild ride today. Up 1.0% at 2pm ET, GC dropped over 2.0% in the 45 minutes after today’s statement. Gold was trading 0.8% lower when stocks closed.
Crude Oil (CL) got off to a strong start today and never looked back. The rally continued after today’s Crude Oil Inventories release (which were essentially in line with expectations), and CL finished the session 6.3% higher at $45.94 a barrel.
So with today’s FOMC report out of the way, traders are left with the same uncertainty we’ve had all year. The question now…is the Fed all talk and no action? We’ll see come December. Until then, traders will turn their attention back to earnings and the economic calendar (especially jobs data and inflation related reports).
Speaking of the economic calendar, tomorrow we have the following reports: Employment Cost Index and Personal Spending at 8:30am ET, Chicago PMI at 9:45am ET, and Revised Consumer Sentiment at 10:00am ET