Markets

Dow Gains 38 Points, but Markets Still Wonder If the Fed Made a Mistake

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Illustration by Michael Haddad

6:35 a.m. It's still all about the Fed.

The Dow Jones Industrial Average got hammered yesterday after the U.S. Federal Reserve made it clear that they were still in hiking mode, even if they expected the pace of rate increases to slow. Asian and European markets followed the U.S. lower.

But selling in the U.S. has slowed Thursday morning, and markets have even managed to edge into the green. S&P 500 futures have risen 0.2%, while Dow Jones Industrial Average futures have advanced 38 points, or 0.2%. Nasdaq Composite futures have gained 0.3%.

So what happens next? Canaccord Genuity's Martin Roberge expects the market to bounce back in a big way over the next two days, but there is no guarantee that happens. And if it doesn't? "Otherwise, we think it will confirm an important break in psychology, the bear market thesis and reinforce the sell-on-strength mentality," he writes. "We believe the Fed has performed an uncommon policy mistake due to a domestic bias that is failing to account for global growth considerations, hence contagion risk. We believe that the Fed has hiked for the last time in this business cycle."

We should know soon enough.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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