Home›Bonds & Rates›Central Banks›S&P 500 futures ease as Fed holds rates but shifts inf…

S&P 500 futures ease as Fed holds rates but shifts inflation outlook

After the Fed left its 3.5% to 3.75% target range unchanged, markets pricing for additional hikes into September and December moved lower, but the stock bounce faded during the session.

Reported · Written up by our desk · Central Banks

The Federal Reserve held its target range for the policy rate at 3.50% to 3.75% in a 9-3 vote, with three voting members preferring an immediate quarter-point increase, according to commentary from FXStreet.

Despite the decision, the article said the market did not sustain a rally, noting the Dow Jones Industrial Average traded near 52,100 after a session high around the 52,800 area, and that a significant slide happened before the decision rather than as a result of the policy outcome.

FXStreet said the post-decision “bounce” recovered a little over 450 points but was fading in real time, arguing that the Fed’s discount-rate repricing did not outweigh other pressures such as the chip complex, the earnings calendar, and single-stock damage from recent weeks.

The piece also pointed to changes in market rate expectations after the meeting, including at least one increase by 16 September now pricing near 64% versus roughly 80% before the announcement, while the probability of at least two increases by 9 December fell to about 42% from 57%. It added that the Fed’s statement highlighted uncertainty tied to the Middle East conflict and cited energy as a driver of price increases the committee said it is looking through, while the chair reiterated the committee has no tolerance for persistently elevated inflation.

Latest closeS&P 500 7,428.78 ▲0.2%|Dow Jones 52,747.32 ▲1.0%

More like this

Sources