Dow Jones Industrial Average (DJIA) futures plummeted 500 points after ‘gloomy’ Fed comments.
Despite a negative economic outlook, chairman Jay Powell’s response was incredibly supportive for the stock market.
Commentators say traders might shrug off the ‘down day’ and we’ll see another leg higher afterwards.
The stock market took a turn for the worse this morning as traders digest last night’s Federal Reserve statement. Dow Jones Industrial Average (DJIA) futures point to a huge 500 point slide on Thursday.
But why? Powell’s commitment to hold rates at zero for two years and continue QE is mega bullish for assets. CNBC’s Guy Adami said traders might take a day or two for the market to read between the lines.
I’ve seen this movie before… [After a Fed statement] you have a down day in the market only to be followed by some huge monster rip on the next day in some sort of delayed reaction.
Dow futures plummet 500 points
In a vicious overnight selloff, Dow futures shed 500 points (1.9%). The correction is perhaps a healthy retrace after a euphoric rally that lured in a wave of retail investor FOMO.