- The Fed raised rates by 25 bps, signaling a potential new tightening cycle and delaying rate cuts until at least 2028.
- The 10-year Treasury yield holds near 5.01%, pressuring rate-sensitive sectors and keeping financials, regional banks, and energy under pressure.
- The S&P 500 faces near-term risk from a 'double hawk' scenario if the Bank of Japan turns aggressively hawkish.
- Semiconductors and large-cap tech lead while financials, regional banks, and energy lag, with the VIX higher and the dollar stronger.
- The author's portfolio remains defensively positioned with 16% cash, prepared for a 5-7% pullback.
Quotes
“The Fed's 25bps hike signals a potential new tightening cycle, extending 'higher for longer' and delaying rate cuts until at least 2028.”
“Thursday's key catalyst is the 12:30 PM ET macro batch, with SPY/QQQ needing to reclaim their pivots to confirm a constructive open, while the principal risk is a data-driven yield backup that extends weakness in financials, small caps, and energy.”