Day Traders Diary

9/20/23

The major averages sold off this afternoon after a hawkish Federal Reserve said it would leave interest rates unchanged but indicated another hike could be on the horizon. The Dow Jones Industrial Average lost 76 points, or 0.22%, to 34,440. The S&P 500 dropped 41 points or 0.94% to 4,402. The Nasdaq Composite slid 209 points or 1.53% to 13,469. The Nasdaq and tech sector took it on the chin with a more than 2% drop in Microsoft, Apple, Google and Nvidia. Information technology and communication services the two worst performing sectors in the S&P 500.

The Fed held rates steady, as was widely anticipated. But the central bank indicated that one more rate hike is expected before the end of the year in its economic projections. The central bank signaled it would end its hiking campaign after that increase and begin cutting rates next year — though keeping rates at a higher level for the year than signaled in June.

The U.S. 2-year Treasury yield jumped to its highest level since July 2006, while the 10-year Treasury yield reached a high not seen since November 2007. Those moves raised concerns about the impact of higher rates and likely put pressure on tech stocks.