THE GIST (“THE WHAT”)
Trading lower during the first half of the session, the S&P 500 index reversed most of the day’s losses in the afternoon session to close modestly lower ahead of the highly anticipated Fed policy meeting tomorrow. Energy stocks were the biggest drag on the broader index as oil prices pulled back late session after hitting a ten-and-a-half month high. The index closed the session at 4443.95, down 9.58 points (-0.22%) over the previous session.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for TUE. 09/19 – Sitting Out the Markets Today
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THE DETAILS (The “How & Why”):
In economic data, U.S. housing starts report came in weaker than expectations, falling 11.3% as against an expected decline of 1%. Treasury yields rose as investors look forward to the Fed’s 2-day policy meeting that ends Wednesday. While markets are broadly expecting the Fed to leave the funds rate target unchanged at 5.25% to 5.50% and maintain its hawkish bias, investors will be closely reading into the Fed’s outlook on inflation and economic growth in its post-meeting press conference.
Despite recent economic data indicating that the core inflation has been taming and crawling towards the Fed’s 2% target, recent sharp rise in crude prices remains a concern. The 10-year treasury yield jumped 6 basis points to close near a 15-year high at 4.363%. Crude prices rallied to a near 11-months high and pulled back in the afternoon session, putting downward pressure on energy stocks. Conoco Phillips fell 1.06% and Exxon shed 0.26%.
The strike launched by the United Auto Workers last week against Ford, General Motors and Stellantis entered its fifth day amid its biggest demand on pay hikes and compensation. Its members also warned that the union could expand its strike to more U.S. plants if no serious progress was made in its talks with automakers. Automakers traded higher for the day with Stellantis gaining 2.11%, and GM and Ford gaining more than 1% each.
Intel tumbled 4.3% after announcing new PC chips with artificial-intelligence capabilities ahead of this holiday season. Concerns about the chip maker’s data-center inventory overshadowed enthusiasm around its new products. Applied Materials, Intuit Inc, Lam Research Corp, and NVIDIA all shed more than 1%.