The Federal Reserve meeting policy statement released on Wednesday signaled an uncertain timing for rate cuts, but not before the second half of the year. Yet policymakers gave a green light to slowing the pace at which the Fed is shrinking its Treasury holdings, which may modestly work against the rise in market interest rates. The S&P 500 turned modest losses into solid gains as Powell spoke, but gave up all its progress late in the day.
The algorithms got excited and the Dow reversed 500 points off the lows after the Fed news, but it didn’t last long as selling came on hard and most of the index gains evaporated.
Below is a 10-minute chart of SPX. A spike at 2:30 PM, then a massive fade.
We are in difficult times and this market doesn’t seem to know right now if it wants to fish or cut bait. The signals are mixed at best and we are in a headline market with sometimes violent gyrations.