The Fed raised rates, but U.S. stocks did not all react the same way. SPY ($SPY), which tracks the S&P 500, fell while chip stocks finished the day higher. The question now is whether this divergence will turn into a new recovery.

Falling oil is positive for those looking for relief after the rate decision. Even so, high energy costs and the Fed's inflation concerns need to be considered together: a one-day price decline does not immediately reduce companies' financing and production costs.

Key takeaways

  • The Fed's target rate range rose to 3.75%-4%. For subsequent decisions, the speed at which inflation falls will be decisive; the fact that one increase has happened does not eliminate rate uncertainty.
  • While QQQ ($QQQ), which tracks the Nasdaq 100, was roughly flat, the chip-company ETF SMH ($SMH) rose. Separating broad-index weakness from resilience within technology helps us avoid drawing a single conclusion for all stocks.
  • Gold and silver funds finished the day lower. Geopolitical risk may create demand for these assets, but high rates raise the opportunity cost of holding metals that pay no interest.

What happened?

  • On September 16, the Fed raised its policy rate by 25 basis points, or 0.25 percentage points. All 12 members voted for the decision. The statement emphasized that spending was resilient, investment was strong and inflation remained high; the rationale was not based only on higher oil prices. The economic projections put the median year-end 2026 rate at 4.1%. Because that is above the midpoint of today's range, the projection leaves open the possibility of another increase. It is not a commitment.
  • On Wednesday, SPY fell 0.44%, while QQQ rose 0.03% and SMH rose 0.64%. The software-company ETF IGV fell 0.56%. The gap between chips and software shows why it is insufficient to read the technology sector as a single move.
  • Wednesday's U.S. Treasury data put the 10-year Treasury yield at 5.01%. This rate matters for borrowing costs faced by companies and households; it does not have to move exactly in the same direction as the Fed's short-term policy rate.
  • In a pre-decision assessment, market commentator Tunç Şatıroğlu (@tuncsatiroglu) considered a bounce from SMH's $540 support, provided the rise continued after the Fed. The day's low was $540.45 and the close was $545.56. Support held, but a strong multi-day recovery still requires follow-through buying.
  • Reuters reported on September 17 that Saudi Arabia offered additional oil shipments to Asian refineries through ship-to-ship transfers off the coast of Oman. Brent fell to $104.59 in early trading. The alternative route is easing supply concerns. But the offer of additional shipments does not mean that damage to the East-West pipeline has been repaired or that all shipments have returned to normal.

What changed since yesterday?

  • In yesterday's note, we were watching the Fed decision and SPY's $756.15 support. The decision is now known, and SPY closed below that support. By contrast, SMH's gain increased from 0.11% the previous day to 0.64%. The response in chips strengthened somewhat as the broader market weakened.
  • GLD ($GLD), which tracks gold, fell 0.61%, while SLV ($SLV), which tracks silver, fell 0.83%. The previous day's gains in metals did not continue; SLV also fell back below the $57.38 support I was watching in yesterday's note.

Market levels

U.S. stocks and Treasuries

  • SPY closed at $754.05. The previous session's low of $749.60 is a nearby support candidate; on the upside, the lost $756.15 level matters first, followed by $760 resistance. It is too early to treat the index's one-day reaction as a strong recovery until this area is reclaimed.
  • QQQ's $704.72 close was above the $700 support candidate seen during the session. If the nearby $712 resistance area is cleared, $720 could come back into focus; a sustained move below $700 would weaken the resilience of technology stocks.
  • SMH held the $540 support area, with $557 as the next important resistance. A break above that level after the $545.56 close would be a stronger sign that buying in chips is progressing. A test of support does not always lead to the same outcome.
  • IGV fell to $104.96. Yesterday's low around $104.10 is a nearby support candidate; if $106 is reclaimed, room could open for a recovery toward the $108 resistance area. For now, software stocks are not joining the rise in chips.
  • TLT ($TLT), which tracks U.S. Treasuries with maturities of more than 20 years, rose 0.21% to close at $80.88. The previous session's low of $80.86 is nearby support, and its high of $81.56 is a resistance candidate. This small gain does not mean Treasury yields fell across all maturities; the fund's maturity profile changes the picture.

Precious metals and crypto

  • GLD's $391.74 close was just below the previous $391.81 support. The new session's low of $388.39 is a nearby support candidate; clearing the $395.31 resistance area above would be important for showing that selling pressure is easing.
  • SLV ended the day at $57.05. Until $57.38 is reclaimed, the previous recovery will not be complete; below, the previous session's low around $56.28 is a support candidate, while the broader $58.73 resistance zone remains above.
  • Bitcoin was around $76,263 this morning. The previous $76,685 support boundary is now the first threshold to reclaim; the $81,853-$83,220 resistance zone remains important for a broader recovery. A brief rise while price remains below that first threshold does not mean the earlier conditions have been restored.
  • Ethereum was around $2,437, above the $2,380 support area; expectations for a stronger rise remain limited until the $2,530-$2,576 resistance zone is cleared. For both assets, how long the move lasts matters more than a single price.

Red flags

  • If the rise in chips does not spread to software and the broad index, the optimism created by a few strong stocks could remain fragile. That is why the number of companies joining the rise matters as much as price.
  • A renewed rise in oil could pressure both company profits and the income consumers have available to spend. If inflation expectations also deteriorate, the Fed's room to maneuver will narrow.

Calendar

  • Today at 3:30 p.m. TRT: U.S. weekly jobless claims, housing starts and building permits. We will watch how employment and the interest-rate-sensitive housing sector are moving together.
  • Today at 5 p.m. TRT: pending U.S. home sales. This will add to the picture of how high borrowing costs are affecting demand.
  • Tomorrow at 4:15 p.m. TRT: U.S. industrial production and capacity utilization. We will compare the data with the Fed's assessment of strong activity.

My analysis

After the Fed, I am looking first at how assets are diverging from one another, rather than at the size of the decision. SMH holding support is positive; SPY remaining below its lost support shows that this resilience has not yet spread across the market. Today, a recovery of the ground lost by the broad index alongside continued buying in chips would be more meaningful than a positive headline on its own.

The second issue is the time lag between oil and inflation. Oil may fall today, but companies' transport costs, consumer prices and borrowing conditions will not return to normal on the same day. I would become more positive if the easing in energy costs continued and combined with a broader recovery in stocks. Otherwise, I will not read a single day of resilient price action as a lasting rise.

Sources

This is not investment advice; it is a research and monitoring note.