The market offered a little bit of everything Wednesday, and it didn't help at all to clarify where we might be heading.
We started off with a gap-up open, but the big-cap technology names lagged badly. All seven of the FATMAAN stocks finished with losses and pushed the Nasdaq 100 exchange-traded fund (QQQ) down 1.6%. Some of that money rotated into financials -- the Select Sector Financial fund (XLF) -- and energy -- like the Select Sector Energy fund (XLE) -- but most interestingly was the money that rushed into a couple of very hot IPOs. Snowflake (SNOW) and JFrog (FROG) saw a frenzy of trading once they finally opened, but both closed in the lower part of the intraday range.
On top of the rotational action was the Federal Reserve's first Open Market Committee meeting since starting its average inflation targeting program. There wasn't a whole lot new, but Chairman Jerome Powell continued to reiterate the dovish stance and promised that the Fed would most likely remain accommodative for years. He emphasized that some fiscal policies could make a critical difference and urged Congress to act.
The initial response to the Fed was positive, but the longer that Powell droned on, the more the selling picked up. There wasn't any actual negative news to push stocks lower, but the "sell the news" inclination picked up once the push higher faded.
What was most notable about the action was the disconnect between big-cap technology and everything else. Overall, breath was quite good with 4,500 gainers to 2,750 decliners and around 175 new 12-month highs. Breadth for the FATMAAN names was zero gainers and seven losers.
It is unusual to see the broad market shrug off the poor action in big-cap technology, but on the positive side, it shows that there is still a buying appetite and market players are happy to buy something other than the same old big-cap names they favored for so long.
Some folks have a hard time seeing beyond the FATMAAN names, so they have a much more negative view of the action. If you look more closely under the surface, there still is plenty of healthy action.
Have a good evening. I'll see you tomorrow.