Key insights
- US stocks experienced a significant downturn following the FOMC meeting, where rates were held steady but officials signaled at least one potential rate hike ahead. This hawkish undertone led to a broad market sell-off across major indices, with small caps and sectors like communication services and consumer discretionary performing particularly poorly. Despite the overall negative sentiment, semiconductor stocks showed resilience. The market's inability to hold earlier gains suggests investor caution and a potential shift towards a risk-off environment.
US stocks (^DJI, ^IXIC, ^GSPC) ended Wednesday's session in negative territory after Federal Reserve officials unanimously voted to hold interest rates at their June FOMC meeting today, while also forecasting at least one possible rate hike ahead.
Yahoo Finance Markets and Data Editor Jared Blikre breaks down the trading day's market reactions to the Fed's big decision.
This was Kevin Warsh's first FOMC meeting he presided over as the new chairman of the Fed.
Kevin Worsh's report card as told by the market. A little bit risk off here. We got the Dow down 500 points or about 1%.
Show you the intraday price action. This was the reaction off of the report uh when it dropped at 2:00 p.m. and then throughout the Fed uh throughout the Fed uh press conference and we don't know how many of those we're going to have left.
Uh it was just kind of down and to the right there. Very similar story in the Nasdaq and we can see a little bit worse than the Dow off one and a third percent. S&P 500 a little bit less than the Nasdaq.
And let's check in on small caps. Uh S&P 600 down uh 1.3% as well.
Uh let's check in on some of the other markets. It wasn't all red. Semiconductors managed to cling on to some gains of 1.38%.
And you can see the market was much higher earlier in the day. In fact, we had new highs off of that report, but they were not able to hold on to those gains. Magnificent 7 started out bad and then at the report actually drifted lower into the close here.
So mega caps continue the story of lagging the general market. They really haven't led for some while. Uh and this is a picture worth talking about.
All 11 sectors in the red along with the S&P 500. The worst off, communication services. That is a mega cap sector, so is consumer discretionary
and uh you can go consumer staples as well. All those down more than 2%.
And here is the Nasdaq picture. You can see some chip stocks adding some green to to uh the board, but Microsoft down 4%, Amazon down 3 and a half, Meta down 5%.
Software not looking that great. Here is that board. You can see a few green names, Crowdstrike up half a percent. Uh Synopsis up 3%, but for the most part, a lot of dark red there.
And then in semiconductor land, bit of a different picture. Broadcom up four, Applied materials similarly, arm up more than five and Intel up more than three.
And within the Dow, only a few green spots here. Financials have really been one of the best performing sectors this month. JP Morgan, Goldman Sachs in the green for about three quarters of a percent, Caterpillar up 1%.
Industrials have been doing really well recently, not so much today, but that does it for the green. IBM down 3%, Salesforce down 4%.
Those of course are that uh software trade. And then even the staples, which are a lot of times defensive, not doing that great. Walmart down two, J&J down half a percent.
I'll leave it on the transports because in Dow theory, uh you see, you want to see the industrials and the transports following each other. Well, transports leading to the downside.
Not sure what to make of this, but uh we got another day in the week to sort this out and on that note, I'm going to hand it back to you, Josh.
All right. Thank you, Jared.