First and foremost, the first interest-rate change in over a year and the first cut in over four years came in at 50bps, setting the target range for fed funds at 4.75-5.00%. Secondly, the S&P 500 index futures responded with wild, choppy action in both directions.
The action was fairly muted overnight and into premarket hours, chopping around mostly in the green. Off the opening bell, the edge went to the bears as they slowly pushed the index futures towards Tuesday’s low. Support was found just above that level as the lunch hour started, and the bulls brought the index futures back up to unchanged just before the interest-rate announcement at 2:00pm EDT.
Once the 50bp cut was announced, the algos initially sold the print but flipped nearly immediately to buy the news of a larger cut. The index futures rocketed up to make new highs for the month, but the bulls couldn’t maintain a bid for long. Less than 15 minutes later, the index was back at unchanged.
The bullish optimism brought the index futures back up to Tuesday’s high by the time Fed Chair Jerome Powell started his speech at 2:30pm EDT, but that bid didn’t last for long either. His speech was fairly neutral-to-hawkish overall, declaring an overall victory over inflation (other than housing), while turning concerns primarily to employment-related figures moving forward.
The chop continued with 20-50+ handle moves, but the intraday high was never seen again. Instead, the bears tested the intraday low multiple times and even breached Tuesday’s low by a couple handles as the close neared. The chop continued right into the close in a more muted fashion, ending the session near the day’s low at 5680 to lose 20.25 handles. The decline also snapped the seven-day winning streak for the index futures’ front month contract.
Among the top components of the index, Apple Inc (NASDAQ: AAPL) emerged as the biggest gainer. The tech giant was able to advance by $3.90 or 1.80% to close at $220.69 for the day.
That performance was over two percent better than the cash index’s decline of 0.30%.
Conversely, the biggest loser ended up being NVIDIA Corp (NASDAQ: NVDA). For the day, the chip designer declined by $2.22 or 1.92% to close at $113.37.
