Stock Market Update

[BRIEFING.COM] Today's Federal Open Market Committee (FOMC) decision was not expected to be surprising -- and it wasn't. The FOMC voted unanimously to cut the target range for the fed funds rate by 25 basis points to 4.50-4.75%.

Prior to the decision, the fed funds futures market had priced in a 100% probability that there would be a rate cut of 25 basis points.

Not surprisingly, the initial reaction in the market to this policy decision was muted. What market participants are anxious to hear is what Fed Chair Powell says at the 2:30 p.m. ET press conference.

Briefing.com's expectation is that he will reiterate that the Fed is going to remain data-dependent for its decisions and that policy decisions will be made on a meeting-by-meeting basis. Market participants, however, will be keen to hear if he makes any implicit comments that suggest the Fed might lean toward holding off on another rate cut at its December FOMC meeting.

According to the CME FedWatch Tool, there is a 29% probability that there won't be a rate cut in December -- still fairly low but roughly double where it was a month ago.

The directive describing today's decision said, "The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate." There was a nod, too, to the recognition that inflation has made progress toward the Fed's 2% goal but remains "somewhat elevated."

The Nasdaq Composite is up 1.4%; the S&P 500 is up 0.6%; the Dow Jones Industrial Average is flat; and the Russell 2000 is down 0.2%. the 2-yr note yield is down five basis points to 4.22% and the 10-yr note yield is down eights basis points to 4.35%.