Day Traders Diary

12/18/24

The major averages fell sharply as the Fed cut rates, but disappointed investors with only two possible rate cuts next year from the initial estimate of four. The Dow Jones Industrial Average fell over 1123 points or 2.5%. The S&P 500 fell 178 points or 2.95% while the Nasdaq dropped 716 points or 3.56%. The weakness of late has been in the Dow, now down for a 10th straight losing day, the longest streak since 1973.  

The central bank reduced its overnight borrowing rate by 25 basis points to a target range of 4.25% to 4.5%, as expected. However, the Fed indicated it would only cut rates twice in 2025, according to its closely watched "dot plot," fewer than the four cuts given in its last forecast. Some are concerned inflation could rear its ugly head again in 2025.

The yield on the 10-year Treasury rose 8 basis points to 4.47%. The 2-year Treasury yield surged 8 basis points as well to 4.32%.

Not much looked good today. Banks, tech, real estate and even utilities were lower today. In the tech space, ironically Nvidia was higher for most of the day after recent weakness in the chip titan. Healthcare, a defensive sector, traded higher today led by UnitedHealth up 3% along with the other HMOs.

In the commodity space, oil was modestly higher, but gold was down 2%. Bitcoin, a recent Wall Street darling, fell 5%.