The S&P 500 hit a new record high before backing off and closing below today’s open. So far, the low interest rate environment (here and abroad), trade deal optimism, and strong Q3 earnings have been the tailwinds supporting the current bull market across all three major indices.
Another reason for today’s near-flatline: the Federal Reserve meeting. Among market participants, the expectation for another 25 basis point cut tomorrow stands at a 96% probability. Should the Fed continue to slash interest rates tomorrow, it would constitute the third cut this year. More importantly, investors will seek clues about the Fed’s future policy decisions.
Yesterday, President Donald Trump said that a trade agreement with China appears to be on track. Both he and Chinese President Xi are scheduled to meet mid-November in Chile, as reported by Reuters. Initially, this report, which indicated yet another delay, caused the markets to tumble slightly before recovering near the opening range.
According to FactSet, over 78% of the S&P 500 companies that have reported Q3 earnings have topped analyst expectations.
October consumer confidence came within consensus range, at 125.9. The pending home sales index came in at a better-than-expected 1.5% for September M/M, while the current index level of 108.7 is the highest we’ve seen it in two years.
The S&P 500 closed down 0.08% at 3,036.89. The Dow closed down 19.30 points, or 0.07% at 27,071.42. The Nasdaq pulled back to close at 8276.85, -49.13 points or 0.59% lower.
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