The stock market received what it expected from the Federal Reserve—a 50 basis point interest rate cut. Stocks rose initially, but the broader stock indexes—Dow Jones Industrial Average ($INDU), S&P 500 ($SPX), and Nasdaq Composite ($COMPQ)—closed lower. Small- and mid-cap indexes followed the broader indexes and closed slightly higher, with the S&P 600 Small Cap Index ($SML) rising by 0.09%. All S&P sectors except Energy closed lower. It was a case of “buy the rumor, sell the news” after the Fed’s announcement. The stock market rose in anticipation of an interest rate cut, so a selloff after the announcement shouldn’t be a big surprise. It’s almost as if the anticipation fizzled off. The selloff wasn’t too damaging, though. Equities are still holding up. The S&P 500 hit a record in Wednesday’s trading, but closed below its blue dashed trendline (see chart below). CHART 1. S&P 500 CONTINUES TO BATTLE AGAINST…
