There are two theories here:
1) It will be tough for the Fed to out-hawk the market with successive rate hikes of 50-75-50 fully priced in (and more)
2) This is a move in very thin liquidity and it's dangerous to overthink it
We have seen plenty of back and forth in the past week in the lead-up to the Fed as the market deleverages, tech cools and the decade-long instinct to buy-the-dip is tested.
Drilling down, the best performing sector here is utilities while real estate lags. That suggests money is going to work into defensive companies and the outperformance of the Dow over the Russell 2000.
