#Fed Hike — Why Didn’t Stocks Rally? 📉

Kentzw

09-17 13:51

The 25bp hike wasn’t the surprise. What comes next is.

The Fed delivered the expected move to 3.75%–4.00%, but stocks barely reacted — QQQ +0.03%, SPY -0.44%.

Why? The market wanted reassurance that this could be the last move.

Instead, the message was: inflation is still too sticky, and another hike remains on the table.

That creates a tough setup for equities:

📌 Higher rates → pressure on valuations

📌 Sticky inflation → fewer cuts ahead

📌 Strong earnings/growth → support for stocks

📌 AI/tech → still carrying much of the market momentum

So the real question isn’t “Did the Fed hike?”

It’s “Has the market fully priced the next hike — or is another repricing coming?”

I’m watching Treasury yields and QQQ closely from here. 👀

What do you think — already priced in, or more volatility ahead?

Fed Hikes for First Time in Three Years — Why No Market Relief?

The Fed raised 25bp to 3.75%–4.00% at 2 a.m. Beijing Wednesday, its first hike since July 2023. The result was in line and stocks still could not rally: QQQ +0.03% to $704.72, SPY −0.44% to $754.05, S&P 500 −0.45% to 7,551.81, gold +1.10%. The weight was the dot plot — 16 of 19 officials want another hike this year — and Chair Warsh saying inflation is too high, too persistent, with no clear improvement in the summer data. Morgan Stanley, JPMorgan and Goldman are still constructive on earnings and growth. But the market priced one hike; the dots say two. Has the market accepted the second one?

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Comments

wavyloo
09-17 14:32
wavyloo
Feels mostly priced for one more move, not a higher-for-longer path. The dot plot gap is where repricing can still bite.

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The market wanted reassurance that this could be the last move.\nInstead, the message was: inflation is still too sticky, and another hike remains on the table.\nThat creates a tough setup for equities:\n📌 Higher rates → pressure on valuations\n📌 Sticky inflation → fewer cuts ahead\n📌 Strong earnings/growth → support for stocks\n📌 AI/tech → still carrying much of the market momentum\nSo the real question isn’t “Did the Fed hike?”\nIt’s “Has the market fully priced the next hike — or is another repricing coming?”\nI’m watching Treasury yields and QQQ closely from here. 👀\nWhat do you think — already priced in, or more volatility ahead?</body></html>","text":"The 25bp hike wasn’t the surprise. What comes next is. The Fed delivered the expected move to 3.75%–4.00%, but stocks barely reacted — QQQ +0.03%, SPY -0.44%. Why? The market wanted reassurance that this could be the last move. Instead, the message was: inflation is still too sticky, and another hike remains on the table. 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