Stocks hit the skids Wednesday as investors tried to reconcile the Federal Reserve decision versus the message that “Kevy” delivered. The S&P 500 Index (^SPX) closed at 7,316, down 112 points. The move took us deeper into the official 7,200/7,460 trading range (trendline support/trendline resistance), counsels Kenny Polcari, chief market strategist at SlateStone Wealth.
By now you know the Fed did nothing. They held rates steady even as the market was pricing in a 30% chance of a hike. That pitted the algos and momo guys against the Fed. Stocks were already weak, but the big reaction came when Kevy took to the podium. It was then that they realized the new Fed Chair had no intention of telling anyone what comes next.
(Editor’s Note: Kenny will be speaking at the 2026 MoneyShow Masters Symposium Sarasota, scheduled for Nov. 30 – Dec. 2. Click HERE to register.)
S&P 500 Index (^SPX)
Source: StockCharts
No roadmap. No promise. No September hint. No “we’re done.” No “we’re hiking.” Just uncertainty. That uncertainty forced the algo and momo crowd to reduce risk. And so, they threw a temper tantrum and hit the sell button in a classic “Sell first, ask questions later” reaction.
It was comical really because the majority of the committee, as well as the majority of investors, got exactly what they expected – no change. And if that wasn’t enough, Warsh told us that three members dissented, voting for a hike and saying that inflation is a problem even as the other nine did not.
We’re approaching the June lows at 7,300 – which might just prove to be an area of support. If we test it and hold, that’s a positive. If we fail, then expect 7,200 to be the next support.
In either case, no one should be surprised at the action. We have discussed this ad nauseum. For the long-term investor, the selloff should be seen as a gift. There are a lot of opportunities and it’s time to take out your shopping list and see what you find.
Have you seen International Business Machines Corp. (IBM)? It’s up 15% off its recent pullback – HELLO????
