Stock market declines after an oversold bounce; Federal Reserve decision looms

Stock market indices pared early losses in the first half of Tuesday’s session, as defeated buyers kept their powder dry ahead of Wednesday’s Fed rate decision. Ford Motor (F) is having a rough day, down more than 9% after warning of rising costs and not being able to find parts.


The Dow Jones Industrial Average is trading 0.8% lower at this hour, worse than the S&P 500’s 0.7% loss. The Nasdaq Composite is down just 0.6% while the Russell 2000 Small Business Index leads the downside, posting a loss of 1.0%.

Trading volume on the New York Stock Exchange and Nasdaq is slightly lower compared to this time on Monday afternoon.

US Treasury yields continued to slide, lifting the 10-year bond above the 3.5% psychological level. The two-year mark is close to 4% and could reach that milestone before tomorrow’s Fed event. Hot inflation numbers out of Japan and Germany last night are driving the latest rise in yields.

Asian markets rose overnight while most European stock exchanges closed down about 1%.

West Texas Intermediate crude fell more than 2% to $83.34 a barrel, giving up yesterday’s bullish gains.

Bitcoin holds over $19,000 after trading around $700 from a 21-month low in June on Monday.

What do you expect from the Fed

The odds of a 75 basis point increase have risen to 84% on the CME FedWatch tool, while 16% are looking for a full percentage point increase.

US stock market overview today

index Code price win/loss % change
Dow Jones (0DJIA) 30585.94 -433.74 -1.40
Standard & Poor’s 500 (0S & P5) 3846.19 -53.70 -1.38
Nasdaq (0NDQC ) 11410.82 -124.20 -1.08
Contact 2000 (IWM) 177.39 -3.13 -1.73
defect 50 (fifty) 26.56 -0.50 -1.85
Last update: 10:42 AM ET 9/20/2022

All eyes will be squarely on the Fed’s “dot chart” after the release, looking for policy shifts in the path of projected interest rate increases through 2023. This tool collects interest rate projections by individual conservatives rather than providing a broad consensus.

Most Fed watchers expect an initial commitment to raise 50 basis points in November. Anything above or below this level can lead to volatility and have an immediate impact on stock prices.

Chairman Jerome Powell has to express his 100% commitment to fighting inflation after his Volcker-like hawk at Jackson Hole in August. However, he may be worried about the speed of stock market losses since that time, and no federal banker wants to be burdened by a market crash.

As a result, he could inject some conciliatory comments about the need for stable and balanced markets, without dampening the rate hike. Of course, he’s running a fine line after a stock rebound in midsummer, which was fueled by poorly worded comments at the July press conference.

Ford was affected by shortages in supplies and rising costs

Ford warned after the closing bell on Monday that supplier costs linked to inflation are about $1 billion more than expected. In addition, the automaker noted that continued supply shortages will force up to 45,000 partially built vehicles out of business until they are completed and sent to dealers.

Shares are trading down 9.8% at this hour General motors (GM) sells Sympathy, now down 4.3%.

Ford stock broke 200 day moving average in March and reversed at the resistance level in mid-August, according to IBD Market Smith. Stocks fell below the 50-day line today.

However, the health 89 Rated relative strength It highlights a strong performance compared to the struggling S&P 500.

Additionally, Ford is expected to post a staggering 30% annual profit growth in 2022. The company reported 27% year-over-year sales growth in August, compared to a meager 4.8% increase in the auto industry.

Winners and losers in the stock market

Dow component nike (NKE) fell nearly 3.5% after Barclays lowered the sports and apparel giant’s rating from overweight to overweight. This former stock market leader is struggling to hold the July low of 99.53.

Las Vegas Sands (LVS) bucks the downward tide, rising more than 3.7% on news that China is taking steps to ease entry for foreigners.

LVS stock rose again above 40.08 buy point from 38 days flat base. Fundamentals are very weak but the RS rating has risen to 90, in response to a rally that has seen its shares shy away from a six-month high.

Oil explorer and producer continental resources (CLR) you are building a file cup with handle With 72.80 buy points. The line relative force It reached its highest level over the past week, but remains far from a 52-week high. CLR shares are trading down 0.7% at noon.

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