By Markus Heitkoetter
￼It was all about the Fed today.
After opening right around yesterday’s close, the major indices remained in a narrow range until today’s FOMC Statment at 2:00pm ET.
Traders were looking for clues in today’s statement, hoping that the Fed would shed some light on what to expect in 2016. And the Fed did just that. The Fed voted 9-1 to leave rates unchanged and lowered the target rate projection for 2016.
The move confirmed traders expectations. After the December meeting, the Fed planned 4 rate hikes in 2016, and had a target of 1.4%. But since then conditions have changed. In response to these changes the FOMC reduced their 2016 and 2017 targets. The Fed also cut the expected number of rate hikes in half.
Traders like what they heard (or were just relieved that the news was behind us) and stocks rallied.
Here’s where the major indices ended the day:
The S&P finished with a 0.6% gain. Up 11 points, the S&P ended at 2,027.
The DOW ended 0.4% higher. Adding 74 points, the DOW closed at 17,326.
The NASDAQ increased by 0.8%. With a 35 point gain, the NASDAQ finished at 4,764.
Crude Oil (CL) rocketed higher with a 5.9% gain. Closing at $38.48 a barrel, CL worked its way back towards recent highs.
Aside from any reaction to today’s Fedspeak, there were 2 reasons traders were bullish Crude Oil today:
Crude Oil Inventories – The inventory report showed a decrease in supply with 1.3 million barrels in inventory versus the 2.9 million expected.
Possible Production Cap Agreement – Reports of a meeting in April by OPEC and non-OPEC members to discuss a production cap hit the wires and were received positively by traders.
The active economic calendar continues tomorrow with Philly Fed Manufacturing and Unemployment Claims at 8:30am ET. At 10:00am JOLTS Job Openings will be released.