The market is moving randomly with a positive bias as we await the Fed interest rate decision at 2 pm ET. There is no question that a rate hike is coming, but the market is going to be intently focused on comments from Jerome Powell at his press conference.
What the market really wants is some clarity as to how much longer the Fed will maintain its very hawkish stance. Unfortunately, it is not likely to receive much clarity. The Fed is highly dependent on how data develop as things move forward.
There are indications that the economy is slowing. Home sales, for example, tend to be very sensitive to interest rates, and there is already some slowing, but employment is still strong. FedEx (FDX) warned last week, and that may be a sign of more economic growth problems to come.
Even if the Fed does have evidence of economic slowing, that doesn't necessarily indicate that prices will fall quickly. There are still supply chain issues, like those mentioned by Ford (F) yesterday. The Ukraine war is likely to drag out over the winter as Putin made it clear that he is not willing to back off anytime soon.
The Fed's goal is to slow growth and employment, which will cut demand and hopefully cut inflation, but there is a risk of stagflation if supply chain problems persist.
Technical conditions are good for some sort of positive response to the Fed, but it is unlikely that the decision is going to produce a sustained uptrend at this point. It is possible that Powell says some market-friendly things, but there is still too much uncertainty about inflation and economic growth for a firm market bottom to develop.
Powell was very terse in his comments at Jackson Hole, and if he maintains that tone today, the market is not going to like it very much.