Market Prep: FOMC - A Cut, But With a Higher Bar for Follow-Through

$IWM $ORCL $SPX

Hi traders,

The Fed just delivered its third consecutive 25 basis point rate cut, but the market’s initial rally quickly reversed into a sharp sell-off. The reason is simple: the Fed cut rates (Dovish Action), but Chair Powell and the Dot Plot sent a major Hawkish Warning.

The expected 25 basis point rate cut, set the new range at 3.50%−3.75%. This move prompted by a weakening labor market initially created a pump in the market.

However, the tone quickly turned hawkish, driven by two key elements: