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All three of the US market averages (^DJI, ^IXIC, ^GSPC) closed Wednesday's session in positive territory following the Federal Reserve's decision to hold interest rates. The Nasdaq Composite leads the day's gains, having risen by over 1.4%.
Market Domination Overtime host Julie Hyman and Yahoo Finance senior markets reporter Josh Schafer recap the market and sector reactions to the central bank's latest rate announcement.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
The Dow finishing the day higher by about 385 points. That's about 9/10 of 1%. The S&P 500 up about 1.1%. But its highest of the day was up, uh, closer to 1 and a half percent or so, 1.3%, and the NASDAQ up 1.4%.
The NASDAQ rise stands out to me surely because we were up over 2% at one point here today, and it felt really risk on, like one of those fed meetings going back a couple years where, oh, the Fed's dovish, the Fed's going to cut soon, everyone goes and piles into risk on, and then it sort of unwound pretty quick, which I think speaks to the market action we've seen as of late, which is kind of, do I dip my toe in? Do I feel comfortable dipping my toe in? And the other thing that stands out if we can work our way to it was the bond yield drop, right? So we talked about the 10-year moving a little bit lower today, which was moderately surprising, I think, to some extent, because you had the Fed's SEP and sort of the median projections there. You had eight officials saying maybe one cut or no cut, but you had bond yields move a little bit lower.
And you have still the market seeming to price in two, to even maybe three cuts this year, which doesn't seem to mesh with what we heard from the Fed.
No, not quite. It seems like Jerome Powell did not want to commit to when the Fed will cut again, really necessarily, if they're going to cut again. He sort of balked at a May meeting, said probably not, more or less. And then that pushes the question of when would we get a little bit more certainty, it seems like, and what policy is going to be, how we can factor that in. But it, I don't think we left this meeting with a crazy amount of confidence, necessarily, with where the Fed's path is headed. I don't know how much we have.
No, and the timing of it, for sure. A couple of other things to check. Even as yields went down, the dollar still remained higher, at least a basket of currencies versus the dollar. So up about a quarter percent there. That was something that Matt Miskin was watching, I know, during the meeting as well.
Yeah, well, and the dollar had plunged during that recent drawdown that we saw in the equity market, right? So I think we have reached a level on the dollar where people are sort of arguing, I don't know how much more downside we need on the dollar, right? We have gotten to the point where the dollar was so strong that it was a headwind equities. But you kind of wanted to perhaps maybe stay in this range at this point and not move too much lower if you're an equity guy.
And then a quick check on the sectors here. Oh, we're already on the sectors. How convenient. So we've got, um, really rotation out of defensives and into more consumer discretionary, the XLY, energy, industrials, tech. So all of that kind of taking the lead on this.
It's the narrative of what Jerome Powell said about the economy, right? For now, they feel, they feel things are solid. So perhaps, you know, you move out of those defensive sectors, you go if the economy's along.
For today, at least. We'll see what happens tomorrow.
