There has been a knee-jerk reaction in the stock market to Fed comment that a March cut is not the base case.

  • The NASDAQ index is now down -1.67%.
  • The S&P is down -1.28%, and
  • the Dow Industrial Average is down -0.48%.

In the Forex,

  • The EURUSD is trading to a new low on the day and looks to retest the 50% midpoint of the move up from the October low. That level comes in at 1.07936. Below that the 100-day moving average is at 1.0774.
  • The GBPUSD is moving away from its 100 and 200 hour moving averages near 1.2700 and is retesting its 50% midpoint of the move up from the December low at 1.26629.
  • The USDJPY is back above swing areas that 146.96 – 147.067. The 100-day moving average is up at 147.62. That is nearly 100 hour moving average and 200 hour moving averages as well.

The March rate cut expectations is down to 30% from around 50% prior to comment from Powell. The expectations for a cut are now pushed out to May.

UPDATE:

  • Dow -195.4 or -0.51% at 38287
  • S&P index -59.31 points or -1.20% at 4864
  • NASDAQ index -265 points or -1.70% at 15240.69

US yields remain lower on the day:

  • 2-year 4.260% -9.9 basis points
  • 5-year nte for 3.902% -9.4 basis points
  • 10 year 3.984% -7.3 basis points.
  • 30-year 4.234% -4.3 basis points