Nasdaq 100 Dips To September Lows, US Yields Rise To July 2006 Peak As Fed Delivers Hawkish Hold
Benzinga – by Piero Cingari, Benzinga Staff Writer.
The tech-heavy Nasdaq 100 index plunged to late August lows after the Federal Reserve decided to keep rates steady at 5.25%-5.5% but indicated the possibility of a further rate hike by the close of 2023 and removing a series of anticipated rate cuts (50 basis points) for 2024.
Many analysts interpret this decision as a hawkish hold. Fed Chair jerome Powell reiterated an intention to proceed meeting by meeting, but also emphasized the need to keep rates high for a longer period until there is confidence in inflation returning to the 2% target.
Market Reactions To FOMC’s September Meeting
- The Invesco QQQ Trust (NASDAQ:QQQ), the largest ETF tracking the Nasdaq 100, dropped 1.5% at 4 p.m. New York time, reaching its lowest point since Aug. 28.
- The SPDR S&P 500 ETF Trust (NYSE:SPY) and the iShares Russell 2000 ETF (NYSE:IWM) both slipped by 0.9%, while the Dow Jones Industrial Average ETF (NYSE:DIA) was only marginally down by 0.2%.
- Among sectors, the worst performers were the Communication Services Select Sector SPDR Fund (NYSE:XLC) and the Technology Select Sector SPDR Fund (NYSE:XLK), both down by 1.5%.
- The yield on the policy-sensitive two-year Treasury increased by 6 basis points to 5.16%, reaching its highest point since July 2006.
- The dollar recovered, reversing its early session losses, with the DXY index rising by 0.1%. The euro (EUR/USD) declined to 1.0657, and the pound (GBP/USD) reached its lowest point since May 2023.
- Gold was slightly positive, up 0.1%, while oil experienced a 1.6% decline, with WTI dropping below the psychological support of $90.
Chart of The Day: 2-Year Treasury Yields Rise To 16-Year Peak As Fed Sticks To Higher-For-Longer Stance
Stock Movers
Among S&P 500 mega caps, the worst performers included:
- Intel Corp. (NASDAQ:INTC), down by 4.6%.
- Alphabet Inc. (NASDAQ:GOOG) (NYSE:GOOGL), down 3%.
- Nvidia Corp. (NASDAQ:NVDA), down 2.9%.
- Netflix Inc. (NASDAQ:NFLX), down 2.4%.
- Microsoft Corp. (NASDAQ:MSFT), down 2.2%.
Read more: Countdown To US Government Shutdown: How Could It Impact The Stock Market?
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