Wall Street pares early gains following Fed's policy statement, ends day mixed

  • Fed leaves policy rate unchanged as expected.
  • Financials help Dow close the day flat.
  • Energy shares extend slide as crude oil prices continue to fall.

Major equity indexes started they mixed and stayed relatively quiet in the first half of the session as investors stayed focused on the Fed's announcements. The FOMC decided to keep the policy rate unchanged at the range of 2 - 2.25% as expected, and didn't deliver any surprising remarks in its policy statement. However, the fact that the Fed didn't touch on concerns over the recent market volatility or the flattening yield curve made it clear that a 25 bps rate hike was imminent in December. The rate-sensitive S&P 500 Financials Index reacted positively and closed the day 0.32% higher.

Commenting on the FOMC statement, "The Fed has recognized that there is one part of the economy that is slowing a little bit, but it is not deterring them from their 'gradual increase' language. Not yet anyway. There is really nothing to point to what the market had hoped, that there would be a more dovish stance. So I think this is more of what we call a hawkish hold,” Jamie Cox, managing partner at Harris Financial Group, Richmond, Virginia, told Reuters.

On the other hand, falling crude oil prices continued to weigh on the energy sector with the S&P 500 Energy Index ending the day with a 2.2% loss. 

The Dow Jones Industrial Average finished the day virtually unchanged at 26,191.36, the S&P 500 fell 7.05 points, or 0.25%, to 2,806.84 and the Nasdaq Composite lost 39.87 points, or 0.53%, to 7,530.89.

DJIA technical outlook by FXStreet Chief Analyst Valeria Bednarik

Technical readings in the Dow´s daily chart maintains a positive technical stance as indicators have decelerated their advances but hold near fresh weekly highs, as the index advanced far above their moving averages. In the 4 hours chart, the risk is also leaned to the upside, as the 20 SMA has extended its advance above the 200 SMA after crossing the 100 SMA last week, while technical indicators remain within overbought levels, without directional strength.

Support levels: 26,079 - 26,020 - 25,967.

Resistance levels:  26,278 - 26,340 - 25,398.

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 extends gains to fresh seven-week highs

The American dollar is under selling pressure amid a better market mood. EUR/USD above 1.1140 ahead of several Fed’s speakers that can rock markets.


GBP/USD trades around 1.29 amid speculation of Brexit vote

GBP/USD is trading around 1.29 as speculation mounts about the fate of the Brexit deal. UK PM Johnson faces a test in parliament after securing an accord with the EU.


USD/JPY: struggles near mid-108.00s pivotal point amid weaker USD

US Dollar Index slumped to multi-month lows below 97.50. 10-year US Treasury bond yield adds more than 1% on Friday. Wall Street's main indexes look to start the day little changed.


Gold turns flat above $1,490 as USD remains under pressure

After dropping to a daily low of $1,485, the XAU/USD pair staged a modest rebound during the American trading hours and turned flat on the day near $1,492.

Gold News

China’s downward economic path offers no escape from its trade problems

There were no surprises in China’s GDP figures as the government portrays an economy slipping steadily lower giving little promise of improvement or support for the waning global expansion.

Read more