The major US indices rebound strongly ahead of the Fed decision tomorrow. The move to the upside comes after the NASDAQ price closed yesterday below the previous low for the year from February 24. The inability to build on that break may have contributed to some of the squeeze in trading today.
The FOMC is expected to raise rates by 25 basis points tomorrow at 2 PM ET, and kickstart what is thought to be a series of rate hikes in 2022 and potentially into 2023 as well.
The dot plot from December had the Fed officials looking for three rate hikes. The market economists are closer to six or seven now. The Fed is expected to push to 4 or 5 (with likely five).
Has the market priced in all the bad news from the Fed and from Russia?
It is to early to tell but money was put to work today after the sharp falls seen lately.
A snapshot of the final numbers shows:
- Dow industrial average up 599.10 points or 1.82% up 33544.35
- S&P index up 89.34 points or 2.14% 4262.47
- NASDAQ index up 367.41 points or 2.92% at 12948.63
- Russell 2000 up 27.25 points or 1.4% at 1968.96
Looking at the NASDAQ index, the price remains below its falling 100 hour moving average at 13231.57. The 200 hour moving average is up at 13598.79. Recall that the last two tests of the 200 hour moving average have found willing sellers (see green line in the chart above). Those who moving averages are still always a way, but if the squeeze continues through the FOMC, those levels would be important in helping the to define a more bullish bias for the pair.
The biggest sector advances were technology +3.3%, consumer discretionary, +3.3%, consumer staples +2.2%. The laggards today were energy -3.7%, real estate +0.8%, and materials +1.2%.
