US equities broadly pull back as rate cut bets wither, S&P 500 sheds over half a percent


  • Investors pulled back from US indexes on Wednesday.
  • US Retail Sales beat expectations, firm economy limits rate cut odds.
  • US benchmarks declined as investors trim rate-cut bets to 57% in March.

US stocks saw broad-base declines on Wednesday after investors were forced to adjust their bets on rate cuts from the Federal Reserve (Fed) after US Retail Sales rose more than expected, implying the US domestic economy remains too strong for the US central bank to begin cutting their main reference rate as soon as investors are hoping for.

Money markets have trimmed their bets of the first rate cuts from the Fed as soon as March, with markets seeing 57% odds of a rate cut, down steeply from over 70% just a month ago. Investor odds of a March rate cut have declined steeply with no material policy changes or announcements from the Fed other than regular appearances from Fed officials routinely warning markets that expectations of rate cuts have run far ahead of what’s logically possible.

US Retail Sales rose by 0.6% in December compared to the median market forecast of 0.4% and stepped well over November’s 0.3% print. Investor hopes of a quickening pace of rate cuts from the Fed hinged on deteriorating consumer conditions within the US, and good news for the economy has become bad news for markets with all focus and hopes pinned on cheaper loans.

The Dow Jones Industrial Average fell a quarter of a percent, closing down 94.45 points at $37,266.67 with the NASDAQ Composite shedding 88.72 points to close down nearly 0.6% at $14,855.62. The Standard & Poor’s 500 (S&P) major equity index also fell 0.56%, closing down 26.77 points at $4,739.21.

S&P 500 Technical Outlook

The S&P 500 tumbled to a fresh weekly low of $4,714.37 on Wednesday before recovering back towards the 200-hour Simple Moving Average (SMA) near $4,750.00.

Despite near-term declines, the S&P 500 remains well-bid on the daily candlesticks, within touch range of new all-time highs beyond the major $4,800.00 barrier.

The S&P 500 remains up over 15% from late October’s last significant bottom near $4,102.02.

S&P 500 Hourly Chart

S&P 500 Daily Chart

S&P 500 Technical Levels

SP 500

Overview
Today last price 4737.93
Today Daily Change -25.39
Today Daily Change % -0.53
Today daily open 4763.32
 
Trends
Daily SMA20 4752.59
Daily SMA50 4631.36
Daily SMA100 4489.01
Daily SMA200 4406.26
 
Levels
Previous Daily High 4780.05
Previous Daily Low 4746.25
Previous Weekly High 4800.76
Previous Weekly Low 4676.8
Previous Monthly High 4794.65
Previous Monthly Low 4542.87
Daily Fibonacci 38.2% 4767.14
Daily Fibonacci 61.8% 4759.16
Daily Pivot Point S1 4746.36
Daily Pivot Point S2 4729.41
Daily Pivot Point S3 4712.56
Daily Pivot Point R1 4780.16
Daily Pivot Point R2 4797.01
Daily Pivot Point R3 4813.96

 

 

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