Wall Street ended marginally higher on Fed day


  • The Dow Jones Industrial Average added 36.28 points, or 0.1% to 27,147.
  • The Nasdaq slid a mere 8.63 points, or 0.1%, to close at 8,177.39
  • The S&P 500 put on less than 0.1%, to 3,006.73.

On the day of he Federal Reserve, the Dow Jones Industrial Average added 36.28 points, or 0.1% to 27,147, while the S&P 500 put on less than 0.1%, to 3,006.73. The Nasdaq slid a mere 8.63 points, or 0.1%, to close at 8,177.39. At session lows, the Dow was down 211.65 points while the S&P dropped 26.97 points and the Nasdaq lost 99.80 points.

The Fed cut the target range for the federal funds rate by 25 bps, but the IOER rate and the O/N RRP rate were cut by 30 bps in reaction to the repo turmoil this week. "However, a more lasting effect would be achieved by raising the level of reserves in the system and launching a standing repo facility. Unfortunately, the Fed is not ready to take these decisions yet. Consequently, we are likely to see more overnight repo operations by the New York Fed in the near term.

Feedback loop between trade policy and monetary policy is likely to lead to another insurance cut

We stick to our view that the feedback loop between trade policy and monetary policy is likely to lead to another insurance cut before the end of the year, but we change our call for the most likely timing from October to December as the divergence of views in the FOMC appears to be leading to temporary policy paralysis on the fed funds rate. In fact, there were three dissenters today. Rosengren and George were against lowering the fed funds rate; in contrast Bullard wanted a 50 bps cut," analysts at Rabobank explained.

DJIA levels

The technical picture remains the same, with that bearish doji daily candle formation through the 27200s leaving a bearish bias on the charts. Considering the Fed, the bears can target the 21-DMA, the 50 and then the 200 DMA. Further below lies the May and Jun lows in the 24700s as a double-bottom target.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: trade war optimism skews the risk to the upside

The EUR/USD pair has rallied to 1.1062 on Friday, its highest since September 20, as risk-on prevailed heading into the weekend. Reports on progress in trade talks between the US and China.

EUR/USD News

GBP/USD's rally stalls in the open as weekend headlines highlight Brexit deadlock

GBP/USD is a touch softer in the open on Monday, starting off the week in the consolidation of Friday's upside extension to the highest levels since mid-summer. 

GBP/USD News

USD/JPY consolidating bull rally into 108 handle on US/Sino trade deal optimism

USD/JPY starts out the week flat to Friday's close after markets rallied at the end of the week. Bullish geopolitical undertones in the form of a U/Sino 'phase 1' trade deal help lift USD/JPY onto the 108 handle.

USD/JPY News

Gold sellers cheer US-China trade optimism against all odds

With the US and China near to end the two-year-old trade tussle, Gold bears give little importance to doubts over soft Brexit and tension surrounding Syria while flashing $1,484.70 as a quote during Monday’s Asian session.

Gold News

US China trade deal propels US markets and yields higher and leaves dollar mixed

The US and China reached a limited trade deal on Friday a first step on the path to what both sides said could be a more comprehensive pact later in the year. President Trump said the countries reached a “very substantial phase one deal”.

Read more

Forex MAJORS

Cryptocurrencies

Signatures