To The Moon

Major stock indexes closed lower on Wednesday, giving up the gains that were posted in the immediate aftermath of the Federal Reserve's decision to cut interest rates for the first time in more than four years

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each fell 0.3%, after seesawing in the final few hours of trading as investors assessed the Fed's policy statement, the quarterly economic projections of Fed officials and comments from Chair Jerome Powell. The S&P 500, which surged to a record high shortly after the Fed decision was announced, ended up snapping a seven-session winning streak.

The Fed's policy committee cut the influential fed funds rate, which was at a 23-year high, by half a percentage point, a bigger move than many market participants had expected and an unusually large adjustment for the Fed. Officials had debated between a quarter-point and half-point cut, and decided inflation was running low enough to justify the more aggressive option.

Fed officials expect to make further cuts in the coming months, reducing the rate by an additional half point over their remaining two policy meetings this year, according to a survey of the committee's members released alongside the policy announcement. Market participants are pricing in deeper cuts by year's end.

Only Energy and Communication Services Sectors Ended In The Lower Green

Large-cap tech stocks, which have led the market during its recent rally, were mixed on Wednesday. AI investor favorite Nvidia (NVDA) fell nearly 2%, while Microsoft (MSFT) dropped 1% and Amazon (AMZN) ended slightly lower. Apple (AAPL) gained nearly 2%, while Meta Platforms (META) and Alphabet (GOOGL) finished slightly higher.

Only S&P 500 Energy sector managed to gain +0.25$ and communication services managed a modest +0.02%.

Note Yield Lower After Fed Decision Of 50 Basis Point

The yield on 10-year Treasurys, which is sensitive to expectations around interest rates, rose to 3.71%, higher than before the Fed decision and up from 3.64% on Tuesday.

10-year note yield decline six basis points to close at 3.699% while 2-year note yield also lost thirty-two basis points to close at 3.596%

Gold futures were down 0.5% at $2,580 an ounce after hitting a new record high around $2,620, while bitcoin was little changed at $60,500 after bouncing around in afternoon trading.

Stocks To Watch

Shares of the discount retailer $Dollar Tree(DLTR)$ added 3.0% on the day. The stock has been under pressure in 2024 as the company navigates a restrained consumer spending environment and considers strategic options for its struggling Family Dollar segment. However, a Wednesday report in The Wall Street Journal highlighted how Dollar Tree and fellow dollar-store chain Dollar General (DG) are pursuing aggressive store-opening targets despite the challenging environment, reflecting confidence that new locations can drive sales growth and market share gains.

Though we saw Dollar Tree gain yesterday (18 Sep), multi timeframe gave a rather negative outlook but if we follow the MACD, we might be able to see some potential upside.

$General Motors(GM)$ shares gained 2.4% after the carmaker said it will offer adapters that allow owners of its electric vehicles (EVs) to access the network of charging stations operated by Tesla (TSLA). Drivers of GM EVs will be able to purchase an adapter for $225 through the carmaker's mobile apps. In other positive news for GM, the company struck a tentative deal with workers at an EV and battery plant in Ontario, Canada, reducing the chance of a work stoppage at the facility.

I do have much expectation for an upside for GM, as the multi timeframe have given a strong uptrend and we could be seeing a bullish MACD crossover.

Hence, I will be watching GM closely.

Summary

There might be some early upside coming for the mega cap and tech stocks after yesterday downside adjustment, but do monitor these stocks closely as investors are still trying to comprehend this 50 basis points cut, with potential another 50 points before end of 2024.

I will be monitoring some of the mag7 stocks i ma holding and see if need to take some profit.

Appreciate if you could share your thoughts in the comment section whether you think market would gave an early rally while we could be seeing investors taking some profits?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.