Fed Says Inflation is Key

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as Fed says inflation is key. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

US futures point to mixed open as investors await Fed rate decision

U.S. stock index futures were mixed on Wednesday, as market participants waited for the Federal Reserve’s decision on interest rates.

The S&P 500 (SPY) rose by +0.33% today. Sector advancers led decliners 9 to 2 as shown below in the sector graph. Communication services (XLC), consumer discretionary (XLY), consumer staples (XLP), healthcare (XLV), industrials (XLI), materials (XLB), real estate (XLRE), technology (XLK) and utilities (XLU) each had small gains of less than 1%. Energy (XLE) led decliners down with a loss of -2.04%. Financials (XLF) suffered a minor loss of less than 1%.

The Dow Jones index added +115 points (+0.43%) to close at 27,186. The Nasdaq climbed +27 points (+0.33%) to settle at 8,303.

Fed Says Inflation is Key

Stocks got a lift Wednesday as investors favored the Fed’s latest rate cut along with comments regarding keeping rates low.

Powell and the Fed struck just the right tone to satisfy equity investors by signalling it would pause rate cuts, but wouldn’t think of hiking again until inflation moved higher.

Stocks moved to their highs of the day after Powell said in a press conference after the decision that the central bank would need to see a “really significant” rise in inflation before the Fed thought about hiking.

The U.S. central bank lowered rates for the third time this year by 25 basis points. The central bank also removed a key phrase from its statement that said it will “act as appropriate” to sustain the current expansion.

The Commerce Department said U.S. GDP grew by 1.9% in the third quarter, topping expected growth of 1.6%. The better-than-expected print was driven by continued consumer spending along with government expenditures.

Key Takeaways…

I took the following CNBC screenshots today regarding three things to watch, sector snapshot for October, signs of complacency and Fed food for thought:

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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S&P 500 Sector Graph

Fed Says Inflation is Key

S&P 500 (SPY)

Fed Says Inflation is Key

Communication Services (XLC)

Fed Says Inflation is Key

Consumer Discretionary (XLY)

Fed Says Inflation is Key

Consumer Staples (XLP)

Fed Says Inflation is Key

Energy (XLE)

Fed Says Inflation is Key

Financials (XLF)

Fed Says Inflation is Key

Real Estate (XLRE)

Fed Says Inflation is Key

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map


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