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MarketBeat Minute(2023-09-21)

MarketBeat Minute

English - September 21, 2023 14:00 - 1 minute - 721 KB - ★★★★★ - 3 ratings
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The S&P 500 fell on Wednesday after the FOMC indicated it was not through raising interest rates. The FOMC held rates steady in September as was expected but said it would raise by another 25 basis points by the end of the year. If so, it would mark the 12th increase since the cycle began, putting interest rates at the highest levels in decades. At current levels, demand has begun to deteriorate; another hike would accelerate the decline and possibly impact S&P 500 earnings.

The S&P 500 is down more than 4% from its recent highs and heading lower. The index has confirmed resistance at a critical level and will pull back at least 5% before the move is through. The risk is that oil prices will continue to rise and accelerate inflation, leading the FOMC to hike rates more than already indicated. In that scenario, the S&P 500 could correct up to 20% or more. Regardless, interest rates are now expected to remain at or above 5% through the middle of 2024, nearly a year longer than previously forecast.