Next Day Prep: Market Alert Fed Hawkish Turn Crushes Tech Giants
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow. Today, the market experienced a significant retreat with the S&P 500 down 1.7%, the Nasdaq down 2.3%, and the DOW down 1.7%. This risk-off day was primarily driven by a shift towards a more hawkish stance from the Federal Reserve.
Overnight Headlines
- Boston Fed President Collins: Rates to stay at current level “for some time.”
- Market Reaction: Expectations for a December rate cut shift dramatically to a coin flip at 51%.
Economic Announcements
Amid the market turbulence, the end of the government shutdown was a non-event as focus shifted to the Fed’s hawkish turn.
Earnings Highlights
- Cisco (CSCO): Stands out in tech, up over 4.5% on strong earnings and guidance.
- Disney (DIS): Sees revenue miss, plunges almost 8% with first annual revenue decline since early 2024.
- Ibotta (IBTA): Declines nearly 24% post-earnings due to weak revenue and guidance.
Top Movers
In today’s sell-off, mega-caps like Tesla (TSLA) and NVIDIA (NVDA) faced significant losses, dragging sectors like Consumer Discretionary and Technology down over 2% each. The fear gauge VIX surged 18% as sentiment turned risk-averse.
Quick Trade Ideas
- Continuation Move: Consider watching Willis Towers Watson (WTW) for a potential entry above today’s high.
- Anticipation Setup: Keep an eye on beaten-down stocks like OPEN and CVNA for signs of a reversal pattern.
Key Takeaway
The market’s narrative has shifted with a more hawkish Fed stance, injecting fear into traders. Stay nimble and closely monitor support levels for potential breakdowns. Look for emerging pockets of strength, like insurance names, which could lead the market recovery.