Indices:
– U.S. equity index futures are slightly higher following losses for the (-0.5% to 7,551) and more so the (-1.2% to 51,461) while the (+0.03% to 28,945) avoided a red finish, as the Fed’s first since 2023 and Chairman Warsh’s emphasis on persistently elevated inflation (see FX/Central Banks below) calmed the further end of the Treasury curve and so too oil prices falling back from recent highs, and market pricing (CME’s FedWatch) is roughly a coin toss on another hike next month with very healthy odds the 25bp interest increase will occur in December
Stocks:
– Shares of Nvidia (NASDAQ:) (+0.8%) finished slightly higher by the close in what was a mixed session for semiconductors and those tied to the ‘AI trade,’ with Intel (+4%) a notable outperformer after a report that it’s in talks with SK Hynix (+1.6% AH) to manufacture memory chips in the U.S.
– Tesla (NASDAQ:) shares (+0.4%) closed slightly higher but the attention was on SpaceX (+5.2%), undoing Tuesday’s losses and experiencing volatile moves ahead of next week’s Starship test that’ll involve a Starlink payload
– Financials suffered amid fears of further rate hikes: Bank of America (-2.7%), Wells Fargo (-3%), Goldman Sachs (-4.7%), Citigroup (-2.4%), JPMorgan (-1%)
– Transportation stocks weakened sharply after J.B. Hunt (-13.3%) warned of an earnings decline, with C.H. Robinson (-2.6%), Old Dominion Freight (-3.7%), and Werner Enterprises (-4.6%) also lower
– Energy stocks fell alongside oil prices: Diamondback Energy (-8%), Occidental Petroleum (-6.6%), ExxonMobil (-3.5%), and Devon Energy (-5.6%)
– Red session for shares of Expedia (-2.1%) suffering a downgrade to underweight from Morgan Stanley
– Meme stock movers: Beyond Meat (+9.6%), GoPro (-3.8%), Opendoor (-2.3%), AMC (+4.3%), BlackBerry (-2.1%), GameStop (+2.5%), Wendy’s (-5.8%)
– Crypto stocks tracked cryptocurrencies lower: Coinbase (-4.4%), MicroStrategy (-2.6%), Mara Holdings (-1.8%), Gemini Space Station (-4%), Bullish (-9.5%), Circle Internet Group (-6.8%)
Commodities:
– ’s decline is relatively contained so far after falling below $4.3K and failing to stay above it earlier this morning as the Fed’s rate hike and hawkish dot plot that sees more interest rate increases boosted the and kept yields on the further end of the curve elevated, though the pullback in energy prices is a plus in the current environment, potentially helping it avoid taking on further losses; was down by a slightly larger percentage unable to stay above $64 but keeping the gold/silver ratio around the 67s
– Oil prices () partially retreating off recent $102 highs and into the $97s as recent comments suggested the damaged East-West pipeline could restart operations within days and that crude was being rerouted through Oman, though any headline to the contrary could see recent losses undone in what is still a relatively volatile period for energy given the lack of geopolitical calm; Russian sanctions bill passes the U.S. House and would give President Trump the ability to impose 100% tariffs on the top purchasers of oil which includes China and India; EIA’s weekly energy inventory estimates showed a small drawdown for oil (-0.64m barrels), a small build for gasoline (+0.79m), and a larger one for distillates (+1.59m)
FX/Central Banks/Crypto:
– little changed and relatively unfazed back above $76K following the latest Fed decision that strengthened the greenback and saw yields on the shorter end of the curve rise, with Ether hovering around $2.4K and on the ETF front both suffering outflows
– rises back above 100 for the first time since July following the Fed’s hawkish hike (see below), with sliding below 1.15 as the greenback strengthened with euro traders also noting whether President Trump will “put very serious tariffs or stop trading with Europe on many things” if the EU proceeds with making Canada an ‘associate member’, into the 1.33s, and back into the 156s
– Federal Open Market Committee raises rates 25bps to 3.75%-4% for the first time since 2023 in what was a unanimous decision, with inflation still “too high” for “too long” and 16 of 18 policymakers seeing at least one more hike this year; revised higher for this year and 2028 and so too growth for 2026 and 2027, while the unemployment rate was revised lower; statement revised to reflect the rate increase and that the policy action “will support a timelier return” to their 2% inflation goal
– European Central Bank’s Pereira that euro zone inflation is not broadening as quickly as in 2022 but is monitoring the risks closely, particularly the surge in gas prices
Capital.com Client Sentiment:
– Indices: Reach extreme buy territory in the Dow 30 (79% from 76% yesterday) as it underperformed among the key equity indices, with heavy long sentiment also climbing in the S&P 500 (76% from 74%); elsewhere reached heavy buy territory in the (66% from 64%), pushed further into extreme buy territory in the (90% from 89%) while fell out of it in the (70% from 78%)
– Commodities: Just shy of extreme buy in gold (77% from 73%) as longs got in following the small pullback, with long sentiment also climbing in silver (to 87% from 86%); WTI’s pullback sees a big unwind in shorts with trader bias not far off shifting (slight sell 51% from near-heavy short 64%)
– FX: Raise their majority buy sentiment in EUR/USD (59% from a slight buy 54% before the FOMC event), GBP/USD (from 58% yesterday to 64% just shy of heavy buy), (71% from 62%) and (shifting from the middle to a slight buy 51%)
Data:
– U.S. for August up 1.2% m/m, well above forecast, with an even larger jump excluding autos and for the control group both rising 1.4%; trade pricing data for the same month shows export pricing up 0.6% m/m and import prices by 0.7% both hotter than anticipated; mortgage applications (MBA) fall again, by 4.1%
– UK in August up 0.5% m/m and sees the y/y reading reach 3.1% while y/y held at 2.6% with all three prints as expected; higher than forecasts
– EZ industrial production in July declined 0.1% m/m; Q2 labor cost falls to 3.1%
Today:
– U.S. , building permits, housing starts, and Philly Fed’s manufacturing survey (4:30 pm Dubai time), (6 pm)
– Bank of England’s policy announcement (3 pm; hold on rates expected but might reduce pace of QT), EZ CPI (1 pm)
