S&P 500 Snapshot: Another FOMC Mini-Drama

Today’s market provided a familiar drama for FOMC Wednesdays. The S&P 500 traded in a narrow range from the opening bell to the 2 PM release of the latest FOMC statement. The index immediately dropped about ten points with the not-surprising statement of another $10B cut to the asset purchase program. But the more dramatic plunge came during Chair Yellen’s press conference, when she quantified the “considerable time” after the end of QE to the start of Fed Fund rate hikes as “around six months.” The index promptly fell to its -1.17% intraday low at 3:10 PM. Subsequent buying essentially halved the loss to 0.61% at the close.

With the hint of rate hikes, the yield on the 10-year rose 10 bps from yesterday’s close. The interim high was 3.04% at the end of 2013.

Here is a snapshot illustrating this afternoon’s tempest in a teapot.

 

 

Despite the Fed drama, volume on today’s trade, while higher than during the two-day rally that preceded it, was still off its 50-day moving average.

 

 

The S&P 500 is now up 0.67% for 2014.

Here is a longer perspective, starting with the all-time high prior to the Great Recession.

 

 

 

 

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.