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Markets Turn Sharply After Powell Comments

FED futures es mes nq mnq ym mym dow s&p nasdaq powell rate cuts

American equity futures markets rose swiftly Wednesday morning after comments from Federal Reserve Chair Jerome Powell. The most notable change was in the Nasdaq index. Micro E-mini Nasdaq futures were down as much as 0.43% just minutes before Powell’s statement but quickly changed course and are now up over 1%.

In his testimony to Congress, Powell noted the central bank was prepared to “act as appropriate” to maintain economic expansion, reinforcing the expectation of an interest rate cut later this month. Powell also stated that U.S. business investments have slowed “notably,” most likely due to speculators’ uncertainty regarding the economic outlook.

According to the CME’s FedWatch tool, a rate cut later this month is 100% probable which traders have likely priced into their analysis. However, a surprisingly positive June jobs number calmed the urgency of the cut.

Market Snapshot

  • Micro E-mini S&P 500 futures (MES) saw a red-to-green swing from -0.36% to 0.86%
  • Micro E-mini Nasdaq futures (MNQ) are now up over 1.3%
  • Micro E-mini Dow futures (MYM) are up 136 points, or 0.62%

In the chart above, today’s session for Micro E-mini Nasdaq futures is shown on a 10-minute interval. The dotted white line shows yesterday’s closing price and NinjaTrader’s Order Flow VWAP indicator has been added for additional price and volume analysis.

As economic uncertainty lingers on, traders should be aware of the market volatility caused by news events and should manage their risk accordingly.

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