US stock indices experienced slight declines after a volatile trading day. Initially, indices opened higher before slipping into negative territory ahead of the FOMC rate decision. Both the S&P and NASDAQ indices reached intraday all-time highs at 6626.99 and 22397.50, respectively.<\/p>\n
The NASDAQ 100 ended a 9-day win streak with a minor loss of 0.08%, and the NASDAQ composite also saw a slight drop after increasing in 8 of the last 9 sessions.<\/p>\n
The final outcomes for key indices were: <\/p>\n
– Dow Industrial Average fell by 0.27%
\n– S&P Index decreased by 0.13%
\n– NASDAQ Index dropped by 0.07%
\n– Russell 2000 declined by 0.09%<\/p>\n
Among the 11 components of the S&P 500, Energy had the highest performance, whilst Utilities had the lowest. Five components ended higher, whereas six saw declines:<\/p>\n
– Energy increased by 1.74%
\n– Consumer Discretionary rose by 0.82%
\n– Consumer Staples gained 0.24%
\n– Telecom Services up by 0.27%
\n– Health Care inched up by 0.03%
\n– Industrials fell by 0.27%
\n– Technology slipped by 0.20%
\n– Materials dropped by 0.50%
\n– Financials decreased by 0.57%
\n– Real Estate fell by 0.68%
\n– Utilities dropped by 1.81%<\/p>\n
We see the market holding its breath ahead of tomorrow’s FOMC decision. The pullback from all-time highs suggests traders are taking profits or buying protection. With the CME FedWatch Tool currently showing an 85% probability of another 25 basis point hike, the real risk is in the forward guidance for the rest of the year.<\/p>\n
This pre-announcement tension is a clear signal to trade volatility. The VIX has climbed over 15% in the last week to around 17.5, reflecting the uncertainty after last week’s August CPI report came in slightly hot at 3.9%. We could consider buying straddles or strangles on indices like the SPX to position for a larger-than-expected move, regardless of the direction.<\/p>\n
The end of the NASDAQ’s nine-day winning streak is a technical sign of exhaustion. This suggests we could be entering a period of consolidation or a minor pullback even with a market-friendly Fed outcome. Selling out-of-the-money call spreads above the new NASDAQ high of 22397.50 may be a prudent way to generate income from this potential ceiling.<\/p>\n
The sector performance provides a clear narrative on inflation and interest rate expectations. Energy’s strength is directly tied to WTI crude prices holding above $95 a barrel following OPEC+ production cuts announced earlier this month. The weakness in utilities and real estate shows the market is bracing for higher rates for longer, a dynamic we last saw during the aggressive hiking cycle of 2023.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US stock indices dipped slightly; Energy led gains while Utilities lagged ahead of the FOMC rate decision.<\/p>\n","protected":false},"author":62,"featured_media":16984,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-30884","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=30884"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30884\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16984"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=30884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=30884"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=30884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}