Nasdaq 100 and S&P500: US Indices Slip Today as Fed Pushes Back on Rate Cut Forecasts

Stocks Reverse Lower as Fed Officials Push Back on Rate Cut Expectations

The major U.S. stock indices are trading mixed but mostly lower after mid-session on Tuesday, with the Dow trying to hang on to its earlier gains. The S&P 500 and Nasdaq Composite gave up their gains and are now negative for the session.

At 19:17 GMT, the Dow Jones Industrial Average is trading 50182.74, up 46.87 or +0.09%. The S&P 500 Index is at 6955.07, down 9.75 or -0.14% and the Nasdaq Composite is trading 23173.859, down 64.811 or -0.28%.

Fed’s Logan and Hammack: Rates May Already Be Neutral

The late-session selloff appears to have been fueled by comments from Dallas Federal Reserve President Lorie Logan, who said Tuesday that interest rates may not need to be adjusted any further based on current economic conditions, CNBC reported. Logan believes current interest rates may already be neutral, suggesting no further cuts are needed unless inflation falls or the labor market weakens significantly.

Cleveland Federal Reserve President Beth Hammack said she thinks the Fed should not be moving its key interest rate either. Hammack favors keeping rates unchanged, preferring patience to assess recent cuts’ impact, citing inflation still too high above the Fed’s target.

The moves in the market suggest traders may have been spooked by the news that interest rates may not be going down as expected. However, since both comments came out ahead of Wednesday’s Non-Farm Payrolls report and Friday’s CPI report, conditions could change as well as their positions. Nonetheless, they appear to be hedging their bets ahead of the reports.

Sector Leadership Flips: Utilities and Real Estate Take Over

The leadership in the S&P sectors has also shifted since this morning. Utilities are now the biggest winner, up 1.83%, followed by Real Estate (+1.30%) and Materials (+1.13%). Financials are now the worst performer, down 1.29%. Technology has flipped from early session strength to down 0.13%.

Individual Movers: Datadog Surges, S&P Global Drops

Late in the session, Datadog is up 14.18%, followed by Masco (+9.02%) and Marriott International (+8.53%). S&P Global is down 9.20%, followed by Raymond James Financial (-9.08%) and Charles Schwab (-8.91%).

Nasdaq Fails at 50-Day MA, Eyes 24843 Support

March E-mini Nasdaq-100 Index futures are trading lower as we head into the last two hours of trading. The earlier rally to 25447.25 fell well short of the 50-day moving average at 25651.50 and even struggled with a long-term 50% level at 25441.75 before turning lower. The index is now trading slightly below a downtrending line at 25282.75.

The index looks vulnerable to the downside into the close if it cannot overtake the key resistance levels. The new short-term range is 24239.75 to 25447.25, making its 50% level at 24843.50 a potential near-term target.

S&P 500 Reversal Top Threatens Test of 50-Day MA

March E-mini S&P 500 Index futures are in a position to post a minor reversal top, which could trigger a quick test of the 50-day moving average at 6937.25. Watch for a technical bounce on the first test of this indicator, but if it fails, prices could drop quickly into a minor 50% level at 6897.25. This is a potential trigger point for an acceleration to the downside.

Recovering the loss and turning higher for the session will put the market back on track for a near-term test of the minor top at 7027.25 and the record high at 7043.00.

Dow Hangs On to Gains, But 49657 Support is Key

March E-mini Dow futures are still higher for the session. If it turns lower, we could see a 50% correction of the 48703 to 50611 range into 49657. With the trend up, look for buyers to show up on a test of 49657. If it fails, the selling could extend all the way into the 50-day moving average at 48990.

More Information in our Economic Calendar.