The Federal Open Market Committee (FOMC) decided in its meeting yesterday to cut interest rates by 25 basis points, as markets had expected, bringing the target range to between 3.75% and 4.00%. More importantly, Fed Chair Jerome Powell stated in his press conference that a rate cut in December is not a certainty and that non-tariff-related inflation is not far from the 2% target.
How did Jerome Powell’s remarks affect financial markets?
The main U.S. stock indices closed mixed:
• The S&P 500, after reaching a record high, closed flat.
• The Nasdaq 100, after reaching a record high, ended up 0.41%.
• The Dow Jones, after also hitting a record high, closed down 0.23%.
Gold prices closed lower by 0.53% at $3,930.
Bitcoin also closed down about 2.56%.
Most major foreign currencies weakened against the U.S. dollar.
What about U.S. Treasury bonds?
Prices of both short- and long-term Treasuries fell, leading to higher yields:
• The 2-year Treasury yield rose by 3.04% to 3.60%.
• The 10-year Treasury yield rose by 2.51% to 4.08%.
• The 30-year Treasury yield rose by 1.87% to 4.63%.
So, who was the biggest winner?
The biggest winner was the U.S. dollar index, which:
• Closed at 99.14 yesterday.
• Gained 0.41%.
Technical outlook for the Nasdaq 100
The uptrend in the Nasdaq 100 appears to remain intact, as:
• It reached 26,182 points yesterday, its highest level ever.
• It closed at 26,120 points yesterday.
Technical indicators seem to support the continuation of this bullish trend for the following reasons:
- The 20-, 50-, and 200-day moving averages are all trending upward.
- The Relative Strength Index (RSI) is currently at 71, indicating overbought conditions.
- There is a bullish crossover between the MACD line (blue) and the signal line (orange), reinforcing the potential for continued positive momentum.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
