Although stocks – especially those in the tech, consumer discretionary and financial sectors – were moving higher in anticipation of a positive response to the FOMC’s interest rate decision and then shot higher shortly after the news was out, once things settled down and it became apparent that the Fed didn’t seem to be as concerned over inflationary pressures as many were hoping, the market quickly fell off of highs and into negative territory.
While many were hoping that the Fed would signal that their focus had shifted back to inflation, their policy statement indicates that further interest rate cuts are on the table, and that they expect commodity prices to come back down to earth on their own accord. Of course, the current pricing action in food and energy prices say otherwise, and as such, materials and energy were two of the only three major sectors to finish in the green.
Given the fact that the averages have become a bit extended here as they stagnated at overhead resistance levels, I wouldn’t be surprised at all to see a pullback. That said, for those that believe, some selling here could allow some charts to set back up and provide some better trading opportunities as we move forward.