Day Traders Diary

9/19/22

The major averages rebounded on Monday in a volatile trading session ahead of the Federal Reserve's two-day policy meeting slated to kick off Tuesday. The Dow Jones Industrial Average jumped 197 points, or 0.64%, to close at 31,019. The S&P 500 gained 26 points or 0.69% to 3,899 while the Nasdaq Composite added 86 points or 0.76% to end at 11,535.

Stocks vacillated throughout the session, with the 30-stock index down as much as 263 points earlier in the day. At session lows, the S&P 500 and Nasdaq shed more than 0.9% each.

Yields pushed higher ahead of the Fed's likely decision to raise its benchmark rate by another 75 basis points to snuff out inflation later this week. The 10-year Treasury yield topped 3.51% and hit its highest level in 11 years.

After some brief hope over the summer that the Fed may be done with its aggressive tightening campaign, investors have been dumping stocks again on fears the central bank will go too far and tip the economy into a recession.

Investors are focused on the Fed's policy meeting slated to begin Tuesday, where the central bank is expected to raise interest rates by another 75 basis points. Investors are also watching for guidance about corporate earnings before the next reporting season begins in October.

Most S&P 500 sectors rose or traded flat, led to the upside by consumer discretionary, industrials and materials. Financials also moved higher as some investors bet that higher rates could benefit their bottom lines. Health care was the laggard, falling after comments from President Joe Biden indicated the pandemic is over.

Stocks slid last week as investors reacted to a hotter-than-expected inflation report and a dismal warning from FedEx about a "significantly worsened" global economy and the major averages posted their fourth weekly loss in five weeks.

A few economic data releases on deck this week beyond the key Fed meeting, including August housing starts on Tuesday and initial jobless claims on Thursday.

Stocks seesawed on Monday but ended the session in positive territory as a big Federal Reserve week kicked off.

A slew of stocks notched fresh 52-week lows on Monday. That included shares of Microsoft, which traded at levels not seen since May 2021. Seagate and Western Digital traded at lows dating back to January 2021 and October 2020, respectively.

Meanwhile, Constellation Energy's stock hit all-time high trading back to its spin-off from Exelon in January 2022.

Vaccine stocks fell on Monday after President Joe Biden said during an interview with CBS' "60 Minutes" on Sunday that the Covid-19 pandemic is done.

"We're still doing a lot of work on it," Biden said. "But the pandemic is over."

Shares of Moderna and Novavax slumped more than 7% each. Pfizer's stock dipped 1.3% while BioNTech shed 8.4%.

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