US equities broadly pull back as rate cut bets wither, S&P 500 sheds over half a percent

Investors pulled back from US indexes on Wednesday.
US Retail Sales beat expectations, firm economy limits rate cut odds.
US benchmarks declined as investors trim rate-cut bets to 57% in March.

Joshua Gibson FXStreet

US stocks saw broad-base declines on Wednesday after investors were forced to adjust their bets on rate cuts from the Federal Reserve (Fed) after US Retail Sales rose more than expected, implying the US domestic economy remains too strong for the US central bank to begin cutting their main reference rate as soon as investors are hoping for.

Money markets have trimmed their bets of the first rate cuts from the Fed as soon as March, with markets seeing 57% odds of a rate cut, down steeply from over 70% just a month ago. Investor odds of a March rate cut have declined steeply with no material policy changes or announcements from the Fed other than regular appearances from Fed officials routinely warning markets that expectations of rate cuts have run far ahead of what’s logically possible.

US Retail Sales rose by 0.6% in December compared to the median market forecast of 0.4% and stepped well over November’s 0.3% print. Investor hopes of a quickening pace of rate cuts from the Fed hinged on deteriorating consumer conditions within the US, and good news for the economy has become bad news for markets with all focus and hopes pinned on cheaper loans.

The Dow Jones Industrial Average fell a quarter of a percent, closing down 94.45 points at $37,266.67 with the NASDAQ Composite shedding 88.72 points to close down nearly 0.6% at $14,855.62. The Standard & Poor’s 500 (S&P) major equity index also fell 0.56%, closing down 26.77 points at $4,739.21.

S&P 500 Technical Outlook

The S&P 500 tumbled to a fresh weekly low of $4,714.37 on Wednesday before recovering back towards the 200-hour Simple Moving Average (SMA) near $4,750.00.

Despite near-term declines, the S&P 500 remains well-bid on the daily candlesticks, within touch range of new all-time highs beyond the major $4,800.00 barrier.

The S&P 500 remains up over 15% from late October’s last significant bottom near $4,102.02.

S&P 500 Hourly Chart

S&P 500 Daily Chart

S&P 500 Technical Levels

SP 500

Overview
Today last price	4737.93
Today Daily Change	-25.39
Today Daily Change %	-0.53
Today daily open	4763.32

Trends
Daily SMA20	4752.59
Daily SMA50	4631.36
Daily SMA100	4489.01
Daily SMA200	4406.26

Levels
Previous Daily High	4780.05
Previous Daily Low	4746.25
Previous Weekly High	4800.76
Previous Weekly Low	4676.8
Previous Monthly High	4794.65
Previous Monthly Low	4542.87
Daily Fibonacci 38.2%	4767.14
Daily Fibonacci 61.8%	4759.16
Daily Pivot Point S1	4746.36
Daily Pivot Point S2	4729.41
Daily Pivot Point S3	4712.56
Daily Pivot Point R1	4780.16
Daily Pivot Point R2	4797.01
Daily Pivot Point R3	4813.96

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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