Stocks closed lower and at session lows in the stock market today after the Federal Reserve decided to cut short-term interest rates by half a point.
After the Fed's announcement, the Dow Jones Industrial Average had jumped as much as 375 points, but the index reversed lower along with other major indexes. The Dow, S&P 500 and Nasdaq closed 0.3% lower.
The Russell 2000 rebounded more than 2.4% earlier, but closed with a minimal gain of less than 1 point. At 2,206, the Russell is up 8.8% for the year, lagging the S&P 500's 17.8% rise.
Volume rose on the Nasdaq and the NYSE, according to early data. This means the key indexes also posted a new mild distribution day. In terms of market internals, declining stocks moderately outnumbered advancers on the NYSE and Nasdaq.
Also in the stock market today, solar, home furnishings retail, metal ores and wood products stocks rallied 3% or more, sharply outperforming the major indexes.
Stocks to watch include Meta Platforms, a member of the Leaderboard portfolio that last week moved past a trendline buy point near 520. Recent action in Meta Platform also resembles a cup with handle that would highlight a new buy point at 544.23.
Carpenter Technology, an aerospace materials play that moved past its own trendline entry near 145.
Carpenter, an expert in metal alloys for aircraft parts, has seen stiff resistance at 147-148, but its uptrend has been bullish since the stock initially broke out of a base near 72 in early April. The stock is now trying to break out past a 148.94 buy point.
According to IBD Stock Checkup, Carpenter Tech holds an enviable 98 Composite Rating on a scale of 1 to 99. The Composite score combines fundamental, technical and fund ownership metrics into a convenient number. It is meant to simplify the stock selection process. However, use charts to pinpoint an exact buy point.
Microsoft Stock Is A Buy Now Even After Ending Its Win Streak; Here's Why
Fed Cuts By Half Point
The fed funds rate, which had stood at a target range of 5.25%-5.5% for more than a year, has gotten trimmed to 4.75%-5%. In the statement, the U.S. central bank noted that the "risks to achieving its employment and inflation goals are roughly in balance."
James Knightley, chief international economist at ING, noted in an email sent to IBD that while one of the FOMC board members argued for a quarter-point cut, "it is clear where the priorities lie: Get policy back to a more neutral setting to avert the risk of recession given growing comfort that inflation is on the path to 2%."
1:44 p.m. ET
Maplebear Breaks Out
Breakouts remain limited, but Maplebear surpassed a new entry. Chip stocks struggled to advance overall.
Maplebear, the operator of the Instacart grocery delivery firm, has yet to lead the current stock market today. But the stock completed the right side of a new base. Shares rallied more than 4% in active trading and surpassed a 39.60 entry point. The 5% buy zone goes up to 41.58.
Google Stock Up 6th Straight Day
Meanwhile, Google search engine owner Alphabet advanced mildly and aimed at a sixth straight up session.
Donald Trump stock Trump Media & Technology sank again and continued its underperformance vs. the S&P 500. Also in the stock market today, homebuilder and construction product stocks cooled off after a recent run.
Trump Media slid more than 3% in below-average volume and hit a session low of 15.41 in the stock market today. The small cap surrendered Monday's sharp gain and is poised to make its lowest close since November 2023.
DJT stock's Relative Strength Rating is a dismal 8 on a scale of 1 to 99, meaning it has outperformed only 8% of all companies in the IBD database over the past 12 months.
Market breadth was slightly bearish until the Fed news, then turned positive. Rising stocks beat decliners on the NYSE by a 5-2 margin and by more than 2 to 1 on the Nasdaq, according to data on Thinkorswim.
SPDR S&P Homebuilders, up in the prior eight sessions of trading, eased mildly before the Fed news, than rallied more than 1.3%. The ETF recently broke out of a good double-bottom base showing a 110.09 entry.
Stock Market Outlook For The Next 6 Months
Trump Stock Down 11% For The Year
Trump Media, majority-owned by the former president, issued a sell signal when the stock's rebound soured in mid-July.
On July 15, DJT stock soared 31% but failed to close above its 50-day moving average. Since then, shares have plummeted, indicating that an overhead supply of willing sellers remained heavy.
Since the start of the third quarter, Trump Media has plunged 52%, while the S&P 500 has moved nearly 3% higher. At 5620, the S&P 500 has advanced 17.8% after ramping up 24% in 2023.
For more on Trump Media stock, please see this stock and chart analysis. The company has lost a total $2.80 per share over the past four quarters on $3.5 million in total revenue. Trump Media holds a 15 Earnings Per Share Rating, according to IBD Stock Checkup.
Meanwhile, Barron's reported a CNBC Fed Survey "suggests Democratic nominee Kamala Harris is more likely to win the November presidential election than Republican candidate Donald Trump."
Updated at 10:46 a.m. ET
The Financial Times reported that Alphabet won an appeal against a 1.5 billion euro antitrust regulation-related penalty from the European Commission.
Alphabet, which posted $84.7 billion in sales in the second quarter, is nowhere near an IBD-style proper buy point yet. But in the current base forming, 168.64 may be a key price level as the Google stock's base shows the elements of a double bottom.
Also, watch how it handles a potential test of resistance at the 50-day moving average.
Alphabet kept climbing above the 200-day moving average, an important technical level.
Stocks End Lower Despite Big Rate Cut; What To Do
Growth Stocks To Watch
In the biotech space, midcap growth stock TG Therapeutics rose more than 2% and hit a new 52-week high of 26.27. The company announced positive results from a study of its Briumvi treatment. Rapid 30-minute infusions proved well tolerated in patients suffering from relapsing forms of multiple sclerosis.
TG Therapeutics got some air play during the first half hour of Wednesday's IBD Live show. Headed into the stock market today, TG Therapeutics ranked No. 7 in the IBD 50.
Going back to Maplebear, MarketSurge chart pattern recognition describes it at the handle of a super long base. That handle could be also viewed as a cup of its own. Either way, a potential entry emerges at 39.60.
Maplebear has grown back into midcap status with a market value of $10 billion.
Beyond The Stock Market Today
Crude oil futures on the NYMEX expiring in December edged 0.2% lower to $69.83 a barrel.
Gold futures rose 0.2% to $2,597 an ounce, but silver cooled off.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
