Market Overview
Today, the S&P 500 Index ($SPX) and the Dow Jones Industrials Index ($DOWI) are showing mixed performance with the S&P 500 up by +0.04% and the Dow Jones up by +0.48%. Meanwhile, the Nasdaq 100 Index ($IUXX) is down by -0.12%. In futures, the September E-mini S&P is up by +0.03%, while September E-mini Nasdaq futures are down by -0.18%.
Market Sentiment
Stock indexes are experiencing a mix of performance as investors await the results from the two-day FOMC meeting concluding today. A notable decline in chipmakers is impacting the overall market, with Nvidia falling by over -2%. This drop follows reports from the Financial Times that China’s Cyberspace Administration has instructed major companies to halt orders for Nvidia’s RTX Pro 6000D chip.
US Housing Data
Today’s housing market news was disappointing, further negatively affecting stocks. In August, housing starts decreased by -8.5% month-over-month to 1.307 million, falling short of the anticipated 1.365 million. Additionally, building permits dropped by -3.7% month-over-month, reaching a 5.25-year low of 1.312 million, contrary to expectations for an increase to 1.370 million.
Mortgage Market Trends
In the week ending September 12, US MBA mortgage applications saw a rise of +29.7%, driven by a +2.9% increase in purchase mortgage applications and a significant +57.7% rise in refinancing applications. The average rate for a 20-year fixed mortgage fell to an 11-month low of 6.39%, down from 6.49% the previous week.
Federal Reserve Expectations
Markets are anticipating a 25 basis point cut to the federal funds target range at the end of today’s FOMC meeting. Additionally, investors will scrutinize the Fed’s quarterly interest rate projections, known as the dot plot, to see if they align with market expectations for approximately 70 basis points in total rate cuts by the end of the year.
Global Market Update
International stock markets exhibit mixed trends today. The Euro Stoxx 50 is down by -0.03%, while China’s Shanghai Composite gained +0.37%. Conversely, Japan’s Nikkei Stock 225 ended the day down by -0.25%. In terms of government bonds, December 10-year T-notes have risen slightly amid weaker-than-expected US housing data, supporting expectations of interest rate cuts by the Fed.
Stock Highlights
Nvidia continues to lead declines in the Nasdaq 100 and Dow Jones after the aforementioned news, with other chip companies like Intel and AMD also suffering losses. On a more positive note, Roivant Sciences saw a gain of over +12%, as its drug met key Phase 3 trial goals. Conversely, Duolingo and Uber faced losses attributed to regulatory probes and insider selling, respectively.
