EB Daily Market Report - Brief Update - Wednesday, September 16, 2026

It's Fed Day. At 2pm ET, we'll get the latest Fed decision, with nearly every sign pointing to a 25-basis point increase, the first rate hike since 2023. This announcement is widely expected, so it really shouldn't carry much of a stock market or bond market reaction. Personally, I believe what the Fed says about future meetings will carry much more weight in terms of market reaction.

All of our major indices are higher today, but still trading within recent ranges. The 10-year treasury yield ($TNX), after moving above 5.00% each of the past two days, did close below 5.00% both days as well. Today and at last check, the TNX is at 4.96%, down 3 basis points. I still believe that a big spike above 5.00% could spook the S&P 500 on a short-term basis. On the flip side, if the TNX is topping currently at 5.00%, that could help propel the benchmark S&P 500 back towards its all-time high. Honestly, the short-term direction is a coin flip to me. I have no strong feelings either way. Longer-term, I see U.S. stocks moving higher.

Leading up to today's announcement, small caps (IWM), regional banks (KRE), transportation (IYT), and homebuilders (XHB) have been among the hardest hit and victims of the "sell on rumor" (of rate hike) strategy. One thing to watch is that once the announcement of the actual rate hike hits, will these 4 groups see a big "buy on news" rally - a relief rally of sorts? I don't know, but as a trader, it's something I'd at least consider.

Let's see what the Fed has to say and go from there....

Happy trading!

Tom