- S&P 500 firmly off course as US equities take a tumble on hawkish Fed.
- Equity indexes extending daily declines heading into Friday market session.
- US Treasury yields stepped higher as Fed sees rate higher for longer.
The Standard & Poor’s (S&P) 500 continued its trip down the charts, sliding into $4,330.00 to end Thursday trading down 1.64%.
The Dow Jones Industrial Average (DJIA) declined over 370 points to end the day at $34,070.42, retreating 1.08%.
The biggest loser for the major US equity indexes was the NASDAQ Composite, backsliding 1.82% to end Thursday at $13,223.99.
The S&P is down 2.55% from Wednesday’s pre-Federal Reserve (Fed) peak, and has declined over 4% since last Friday’s peak of $4,515.
Fed to see rates held higher longer, knocking equities back for a second day
The Fed held rates at 5.5% as markets broadly expected, but the Federal Open Market Committee (FOMC) raised their forward-looking rate expectations, with Fed officials seeing the year-end interest rate for 2024 at 5.1% versus the previously forecast 4.6%.
Inflation continues to recede in the US domestic economy, but sticking points remain and the Fed is leery of approaching a rate cut cycle too quickly, and interest rates are now only expected to decline by half a percent next year.
S&P 500 technical outlook
The S&P’s decline for Thursday sees the equity index tumbling through the 100-day Simple Moving Average (SMA) currently resting just below $4,400.00.
The week’s action also sees the S&P 500 skidding through a rising trendline from March’s early lows near $3,800.00, and the equity index’s recovery appears to be under threat as prices inch towards the 200-day SMA currently rising into the $4,200.00 region.
S&P 500 daily chart
S&P 500 technical levels
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