Stock market slump after oversold surge; Fed decision looms

Stock market indexes trimmed early losses in the first half of Tuesday’s session, as beaten-down buyers kept their powder dry ahead of Wednesday’s Federal Reserve rate decision. ford motor ,F) having a terrible day, down more than 9% after warning that costs are going up and it can’t find the parts.


The Dow Industrial Average is currently trading 0.8% lower, worse than the S&P 500 index’s 0.7% loss. The Nasdaq Composite is down just 0.6% while the Russell 2000 Small-Cap Index is down 1.0%.

Volume on the NYSE and Nasdaq is slightly lower this time than on Monday afternoon.

The US Treasury yield continued to decline, lifting the 10-year note above the psychological 3.5% level. Two years closer to 4% and could reach that milestone before tomorrow’s Fed event. Overnight hot inflation numbers from Japan and Germany are driving the latest uptick in yields.

Asian markets were up overnight, while most European stock markets closed with a fall of nearly 1 per cent.

West Texas Intermediate crude is down more than 2% to $83.34 a barrel, marking yesterday’s upside gains.

Bitcoin is above $19,000 on Monday after trading within a June 21-month low of $700.

what to expect from the feds

The probability of a 75 basis-point increase on the CME Fedwatch tool has risen to 84%, while 16% are looking for a full percentage-point increase.

US Stock Market Today Overview

index sign, symbol worth profit loss % Change
Dow Jones ,0 paisa, 30585.94 -433.74 -1.40
S&P 500 ,0S&P5, 3846.19 -53.70 -1.38
Nasdaq ,0NDQC , 11410.82 -124.20 -1.08
Russell 2000 ,IWM, 177.39 -3.13 -1.73
IBD 50 ,ffty, 26.56 -0.50 -1.85
Last Updated: 10:42 AM ET 9/20/2022

All eyes will be focused solely on the Fed’s “dot plot” after the release, looking for a policy change in the trajectory of rate hikes expected in 2023. The tool collates interest rate forecasts from individual governors rather than providing a broad consensus.

Most Fed watchers expect an initial commitment to a 50 basis-point increase in November. Anything above or below that level can increase volatility and have an immediate effect on equity prices.

Chairman Jerome Powell has to express a 100% commitment to fighting inflation after his Volker-like flurry at August’s Jackson Hole convention. However, he may be concerned about the velocity of stock market losses from that point on, and no Fed banker wants to be saddened by a market crash.

As a result, he may inject some conciliatory comments about the need for stable and balanced markets, without lowering the throttle for rate hikes. Of course, he treads a thin line following the midsummer equity rebound, which was fueled by poorly worded comments at a July news conference.

Ford Stung by Lack of Supply and High Cost

Ford warned after Monday’s closing bell that inflation-related supplier costs were running around $1 billion higher than expected. In addition, the automaker noted that the continued shortage of supplies will force 45,000 partially built vehicles to remain idle until they are exhausted and shipped to dealers.

Shares are currently trading with a decline of 9.8% General Motors ,GM) is selling in sympathy, which is now down 4.3 percent.

Ford stock collapses 200-day moving average in March and in mid-August reversed to that resistance level, according to IBD Marketsmith, The stock fell below the 50-day line today.

Still, healthy 89 Relative Strength Rating A comparison of the struggling S&P 500 index highlights solid performance.

In addition, Ford is expected to post an impressive 30% annual earnings-per-share growth in 2022. The company posted 27% year-over-year sales growth in August, compared to the auto industry’s modest 4.8% growth.

stock market winners and losers

dow component nike ,ofAfter Barclays downgraded the sports and apparel giant from overweight to equal weight) has fallen nearly 3.5%. The former stock market leader is struggling to keep July’s two-year low of 99.53.

Las Vegas Sands ,lvs) is turning the tide on the downside, rising more than 3.7% on news of China taking steps to ease foreign entry.

LVS Stock 40.08 . rose above point of purchase 38 days flat base, Fundamentals are extremely weak, but the RS rating has risen to 90, in reaction to a rally that has driven its shares to six-month highs.

Oil Explorers and Manufacturers continental resources ,CLR) is building cup with handle With 72.80 buying point. relative strength line Reached a high last week, but remains below its 52-week high. CLR shares are trading with a decline of 0.7% at noon.

Follow Alan Farley on Twitter @msttrader,

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