Aside from a lack of a comment why that may be relevant ...
And, as to the reaction ...
... The Federal Reserve did what markets expected Wednesday. But that didn't stop investors from dumping risk assets in droves.
Stock sold off violently at the end of the session after the Fed cut interest rates by a quarter of a percentage point, its third straight reduction, and Chair Jerome Powell indicated that the central bank will likely put further reductions on hold while inflation stays above its 2% target.
The S&P 500 Index, which was up slightly before the announcement, plunged 3% for its worst "Fed Day" since March 2020, when the central bank made an emergency cut on a weekend in response to the Covid pandemic. Fewer than 20 of the benchmark's stocks closed in the green. The risk off move was most acute in small-capitalization shares, with the Russell 2000 Index sinking 4.4% for its biggest decline since June 2022.
Treasury yields soared on the news, marking their biggest hawkish move on a Fed decision day since the taper tantrum in 2013. Fear rippled through the market, with the Cboe Volatility Index, or VIX, leaping to 28, the highest since the August volatility shock.
Here's a sense of how Wall Street pros reacted on Wednesday afternoon:
Mark Luschini, chief investment strategist at Janney Montgomery Scott
The cut wasn't surprising. There was almost a 100% probability priced in. But I think there was some concern about the language that accompanied the news. Not just about the data, but also the policy initiatives of the upcoming administration. The market was expecting two to three cuts next year, and leaning more heavily toward three. Now it seems like we should be on the lighter side of two. The market is factoring in something that should've been known but wasn't fully baked in. ...
