Counting down to the Fed rate decision: What you need to know

Market Overview - The market is currently in a wait-and-see mode ahead of the Federal Reserve's decision, with NASDAQ showing a decline while other indices are performing positively [1] - The 10-year yield has reached 4.20%, the highest since September 4, raising questions about its impact on equities [1] Interest Rates and Equities - Technical resistance for the 10-year yield is noted between 425 and 430, with a more significant resistance level for equities identified at 450 [2] - Historical context shows that yields have risen after each cut since September, with current yields only nine basis points above the levels when cuts began [3] - The rise in yields following the September cut was 100 basis points by the end of the year, suggesting that current concerns about yield increases may be overstated [4] Federal Reserve Outlook - The language used by the Fed regarding future rate cuts, particularly if it is hawkish, is expected to have a more substantial impact than today's rate decision [5] - There is speculation about the potential for elevated bond market volatility returning in 2026, which could pose challenges for the market [6][7] - The market appears to have already priced in a hawkish stance from the Fed, leading to bullish sentiment among investors [8] Earnings Reports and Market Reactions - Upcoming earnings announcements from Oracle and Broadcom are anticipated to be significant for market direction, potentially overshadowing the Fed's announcements [8][12] - The market is currently at a high, with the S&P and NASDAQ showing minimal percentage changes, indicating uncertainty about future guidance from major companies [12] Future Economic Indicators - The probability of a follow-on rate cut in January has decreased to 23%, with more confidence in a cut expected by June [19][20] - The upcoming economic data next week could dramatically alter the Fed's outlook and policy decisions [22]