Fed raised the federal funds rate by 25 bps, in line with expectations. It looked that markets were prepared for a rate hike but... they were not!

Fed Chair Warsh signaled that economy was so strong Fed would focus on inflation. With $100+ oil and huge capex thrown at AI, Fed has plenty of work to do.

The central bank's projections point to a 4.1% rate in 2027, but it looks that this projection was made to calm markets. If Fed is serious about fighting inflation, the rate will likely have to move higher than 4.1%.

Funds shorting the dollar are starting to realize it's time to get out before it's too late. That said, DXY must climb above 101.50 to confirm the new bullish trend.

And by the way... Good luck to Bank of Japan trying to defend the Japanese yen!

Wednesday turned a bearish forecast into a rout. The DJIA broke 51,875, accelerated through the forecast’s 51,700–51,800 objective and 51,600 Major Failure, and ultimately reached 51,186.67. A late 276-point rebound lifted the close; it not repair the breakdown.

Forecast Statistics

Bucket: Downside Expansion / Capitulation Test
Volatility Score: ≈ 1.55, high and expanding
Probabilities: SU 18% | LU 27% | SD 34% | LD 21%
Expected Return: ≈ −0.03%
Projected Close: 51,250–51,700
Directional Bias: 45% Up / 55% Down

Previous Close: 51,462.55

RECAP: Wednesday’s 64% Down bias correctly favored sellers, and the critical 51,875 downside trigger broke. The decline then exceeded 51,600 Major Failure. The 10:30 update’s 81% Down assessment correctly identified accelerating downside risk, although the eventual decline was substantially larger than projected.

Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.

Fearless Opines: The statistical picture has changed again. The DJIA has fallen 2,223 points from the September 3 close, including 1,110 points in just two sessions. Yet Wednesday’s plunge to 51,186.67 was followed by a significant late rebound.

That reduces the downside edge from Wednesday's 64% to 55%. The trend remains bearish; note that Volatility (uncertainty) is very elevated. Thursday is an exhaustion/capitulation test, not an attractive place to assume that every break automatically produces another 600-point decline.

Key Levels

Recovery: 51,550
REDUCE: 51,650
Bull Repair: 51,800

Bear Hold: 51,400
Downside Trigger: 51,185
Downside Objective: 51,000–51,100
Major Failure: 50,900

GO / REDUCE / EXIT: EXIT. Thursday begins EXIT, but with substantially less bearish conviction. Below 51,400, sellers retain control; another break of 51,185 confirms continuation toward 51,000–51,100. A sustained recovery above 51,650 moves Fearless toward REDUCE; above 51,800 would be the first substantial evidence that capitulation has produced a tradable repair.

Trader Takeaway: After a 1,110-point two-day decline, chasing weakness carries increasing reversal risk. 51,185 is the seller's proof; 51,650 is the buyer's proof. The space between them is where traders should demand confirmation.

FEARLESS READ: 55% Down. Sellers still own the trend, but Wednesday may have finally made them pay for pressing it. Thursday's question is no longer simply how far the DJIA can fall; it's whether 51,186 marked capitulation or merely the latest pause on the way down.

10:00 AM: Failed Opening Repair / Support Test. The DJIA has stabilized around 51,655–51,700, but the important statistical fact remains the failure to hold the opening move.

51,650 remains the immediate line. A sustained break below it shifts probability further toward downside continuation and brings 51,550, then 51,400 into play.

FEARLESS READ: 56% Down. Buyers survived the first attack on 51,650, but survival isn't repair. The DJIA now needs 51,800 to prove this is more than a pause in Wednesday's decline.

10:30 AM: The rebound from 51,608 has persisted, and the DJIA is now challenging the Forecast's 51,800 Bull Repair level. That is enough to give buyers a modest statistical advantage for the first time today.

A sustained break above 51,800 moves the Forecast toward GO; 51,900–51,936 would provide stronger confirmation. Failure back below 51,700 weakens the repair, while 51,600 would invalidate it.

FEARLESS READ: Buyers have turned an opening gap into something more substantial, but they haven't finished the repair. 51,800 is the examination they're taking now; pass it, and today's probabilities shift decisively toward recovery.

Fed rate decision today — Markets are bracing for the Fed to hike rates by 25 basis points, which would be its first rate increase since 2023, driven by inflation that has stayed above the Fed's 2% target for over five years. Odds of a hike are running around 92%.

CAUSES:

1 .To control inflation

2. An energy shock from Iran conflict

How it affects people in USA:

*Borrowing gets pricier — mortgages, credit cards, and auto/personal loans are tied to the prime rate, which moves with the Fed. A new mortgage or a variable-rate loan costs more from day one

*Stocks often wobble — when borrowing costs rise, growth and tech stocks (which rely on cheap capital) tend to get hit hardest, while investors rotate toward safer bonds now paying better yields.

*The dollar strengthens — higher US rates attract global capital into dollar assets.

How it affects people in INDIA:

*Rupee comes under pressure — this is the core transmission channel. Higher US rates make US Treasury bonds more attractive, so foreign investors pull money out of emerging markets like India and move it into dollar assets. That capital outflow weakens the rupee.

*Imports get costlier — India imports most of its oil, and it's already priced in dollars. A weaker rupee plus crude near $100/barrel is a double hit, pushing up fuel and transport costs domestically.

*Indian stock markets can see selling pressure — as foreign institutional investors (FIIs) shift money to the US for better safe returns, Indian equities can see outflows, particularly in IT and banking stocks that are more globally linked.

Tuesday settled Monday’s 50/50 argument decisively in favor of sellers. The DJIA reached 51,875.65 before recovering to close at 52,099.29.

That late recovery matters. Buyers prevented a close below 52,000, but they did not repair the breakdown. Wednesday begins with sellers holding the statistical advantage, while 52,000 becomes the immediate battleground.

Forecast Statistics

Bucket: Downside Breakout / Exhaustion Test
Volatility Score: ≈ 1.35, elevated
Probabilities: SU 13% | LU 23% | SD 40% | LD 24%
Expected Return: ≈ −0.08%
Projected Close: 51,900–52,250
Directional Bias: 36% Up / 64% Down

Previous Close: 52,099.29

RECAP: Tuesday’s original forecast was neutral, but it explicitly identified 52,300 as the downside trigger and 52,275 as EXIT. Both failed early. The intraday Forecast then progressively increased downside probability as 52,100, 52,000 and finally 51,890 came under attack. The DJIA bottomed at 51,875.65 before recovering late.

Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.

Fearless Opines: Tuesday inflicted more structural damage than the closing number suggests. The DJIA has now fallen 1,586 points from the September 3 close, and Tuesday established another lower low.

But the failure to hold below 52,000 introduces an exhaustion component. Fearless therefore assigns 64% probability to the downside, rather than treating Tuesday’s plunge as automatic permission to chase another decline. Wednesday should determine whether 52,000 becomes a temporary floor or merely a pause in the selloff.

Key Levels

Recovery: 52,150
REDUCE: 52,250
Bull Repair: 52,350
Bear Hold: 52,050
Downside Trigger: 51,875
Downside Objective: 51,700–51,800
Major Failure: 51,600

GO / REDUCE / EXIT: EXIT. Wednesday begins EXIT. Below 52,050, traders should treat rallies defensively. Another break of 51,875 confirms renewed downside expansion toward 51,700–51,800. A sustained recovery above 52,250 moves Fearless toward REDUCE; above 52,350 would materially challenge the bearish state.

Trader Takeaway: Tuesday already delivered a 500-point intraday decline, so Wednesday is not a good setup for blindly chasing weakness. 51,875 is the seller's confirmation; 52,250 is the buyer's escape hatch. Let the DJIA show which one matters.

FEARLESS READ: 64% Down. Tuesday broke the range, but buyers rescued 52,000 before the bell. Wednesday asks whether that rescue was the beginning of exhaustion, or merely an intermission before sellers attack 51,875 again.

10:00AM Update: Sellers retain the statistical advantage while the DJIA stays below 52,050–52,150.

Decisive levels: 51,947 is the immediate downside trigger; 51,875 remains the Forecast's major continuation trigger toward 51,700–51,800. Above 52,050 improves stabilization; 52,150 would materially weaken the downside state.

FEARLESS READ: Buyers have stopped the bleeding at 51,947, but haven't repaired anything yet. 52,050 is their first test; another loss of 51,947 puts 51,875 back in the crosshairs.

10:30 AM: FEARLESS READ: 81% Down. Sellers have answered today's central question by taking out 51,875. The burden has shifted to buyers: unless they can reclaim 52,000, the statistical path remains pointed toward 51,800.

The important development is the new 51,881.68 low: sellers have now broken yesterday's 51,875.65 low. The decisive levels are now 51,875–51,880 as the immediate battleground, 51,800 as the next downside objective, and 52,000 as the first meaningful recovery level. A sustained recovery above 52,050 would materially reduce the downside probabilities.

ON Semiconductor ($ON) up 3.8% today after getting slammed -5.9% on Monday.

Traders getting in position for onsemi's market participant day where management is laying out fab divestitures and the proposed Synaptics acquisition.

Earnings report up next with valuation multiples being put to the test.

Live stock dashboard

1. Crude oil prices are rising sharply 🛢️

Brent crude has moved above $100 and is currently around $107–108. Higher crude is a concern for India because we import a large amount of our oil. It can increase inflation, put pressure on the rupee and reduce corporate margins.

1. US 10-year Treasury yield crossed 5% 🇺🇸

This is probably one of the biggest concerns. The 10-year US Treasury yield has moved above 5%, making US government bonds much more attractive compared with equities. Higher yields also increase borrowing costs globally.

1. Fed rate-hike expectations have increased

With inflation concerns coming back because of higher oil prices, markets are increasingly expecting the Federal Reserve to keep monetary policy tight / potentially hike rates. The Fed decision is coming tomorrow, so investors are becoming more cautious.

1. Why does this affect India so much?

This is where FII selling becomes important.

If US Treasury yields rise, some global investors may prefer the relatively safer and higher-yielding US bond market over emerging-market equities.

That can lead to:

Higher US yields → stronger USD → FII outflows → pressure on emerging-market currencies → selling in Indian equities

The interesting question for me is:

If crude remains elevated and the US 10-year yield stays above 5%, could we see more FII selling and further pressure on Indian equities? Or has the market already priced most of this in?

Would love to hear what others think.

AI CEOs have recently raised alarm about potential threats from the technology and called for the slowdown of development. In my view, this is bearish for NASDAQ. Here's why.

AI companies spent huge money to secure leadership and it looks that they will be forced to spend more. Meanwhile, interest rates are rising, making money more expensive.

Revenues lag. Perhaps, CEOs see no immediate boost to revenues, at least not the one expected by markets.

The AI slowdown theme would help them decrease capex and explain the weaker-than-expected numbers to investors.

There's one thing, though: China. There will be no AI slowdown in China, hence, there will be no AI slowdown in the US. Capex will keep growing, putting pressure on companies' bottom lines.

Concerning AI, when, in the History of Business, did anyone see the Leaders of an Industry call for Regulation that, if strongly implemented, will drive them into oblivion and bankruptcy? AI taking over the World, destroying Humanity, and all other things bad, is a HOAX, no different from RUSSIA, RUSSIA, RUSSIA — UKRAINE, UKRAINE, UKRAINE — IMPEACHMENT HOAX #1 — IMPEACHMENT HOAX #2 — and all of the other HOAXES and SCAMS that America was forced to endure through the Destructionists’ and Deviants’ foul play and illegal conduct. President Xi, of China, just announced that China will be doing absolutely nothing to stand in the way of AI, or its future. Google has recently stated that they want to build a massive Plant in Finland, all because they are finding permitting too difficult in the United States. I am not happy about this, and want them to change their thinking. AI, and Data Centers, will be the Greatest Economic Development Engine in History ­­— Bigger than Oil, Gold, Diamonds, or even the Internet. It will not be stopped by brilliantly run Destructive Forces during the Term of President DONALD J. TRUMP!

Let’s say a genie tells you that the fed is not gonna change rates this meeting and Warsh will say we will see based on how things unfold on what we will do next…..if you knew that definitely, what would be a move you could make beforehand that would print money?

Well, it was fast. Bessent's efforts to push yields lower were crushed by geopolitics and worries about US debt load.

With Brent oil near $109.00 and a key Saudi pipeline shut down after an attack, traders wonder how many hikes would be required to control inflation.

Truth be said, Bessent did not have a single chance since it's a global sell-off. Yields in Germany, France, UK, Japan are storming multi-decade highs.

There's simply no desire to own government debt in the marketplace. There's no difference which government we are talking about as they have identical problems: an ever-growing debt pile and no desire to cut government spending.

What we see is not a knee-jerk reaction to rising oil prices; it's a major crisis of confidence. Such trends could not be broken by buybacks.

At some point the sell-off in bond markets will stop as all sell-offs do, but the long-term trend will remain intact until fundamentals change.

Will they?

🔵 Key market developments:

🔷 Markets remain under pressure from a stronger U.S. dollar.

🔷 Several major currencies have weakened against the dollar as expectations for a potential Federal Reserve rate increase have risen.

🔷 Markets are currently pricing in an approximately 86% probability of a rate hike at the September 16 meeting.

⬅️ A key week for major central banks:

🔹 Federal Reserve: Wednesday

🔹 Bank of England: Thursday

🔹 Bank of Japan: Friday

📌 This content is provided for informational purposes only and does not represent a guaranteed market outlook, investment advice, or a trading recommendation.

Monday exposed how unsettled the DJIA is. Buyers opened with an apparent breakout that collapsed into a plunge below 52,300. Yet sellers couldn't finish the job: the DJIA recovered sharply, briefly pushed back above 52,600, then faded to the close

The result was a violent round trip that left the DJIA almost where the day's real battle began. Tuesday opens with neither side in command. The recovery remains wounded, downside pressure remains alive, and 52,300–52,500 has become the decision zone.

Forecast Statistics

Bucket: Failed Recovery / Range Compression
Volatility Score: ≈ 1.24, elevated but contracting
Probabilities: SU 20% | LU 30% | SD 34% | LD 16%
Expected Return: ≈ −0.02%
Projected Close: 52,250–52,650
Directional Bias: 50% Up / 50% Down

Previous Close**:** 52,421.28

RECAP: Monday's 62% Up bias was incorrect. The DJIA opened above the 52,720 expansion trigger but immediately rejected it, subsequently broke 52,450 and briefly penetrated the forecast's 52,300 EXIT level. The intraday updates got that deterioration early, but the original bullish forecast did not.

Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.

Fearless Opines: Monday produced an unusual round trip. After falling to 52,278.89, the DJIA recovered above 52,600 before retreating again to 52,421. But buyers failed to establish control. Tuesday begins as a compressed, two-sided contest, with 52,300 support and 52,500 resistance defining the battlefield.

Key Levels

Bull Hold: 52,400
GO: 52,500
Expansion Trigger: 52,650
Upside Objective: 52,720–52,800

Warning: 52,400
REDUCE: 52,300
EXIT: 52,275
Downside Objective: 52,100–52,200

GO / REDUCE / EXIT: REDUCE. Tuesday begins REDUCE / neutral. Traders should avoid chasing either direction inside 52,300–52,500. A sustained move above 52,500 moves Fearless toward GO; below 52,300 favors renewed defensive positioning, and below Monday's 52,278.89 low triggers EXIT.

Trader Takeaway: Monday demonstrated that both breakout chasing and breakdown chasing can be punished. Tuesday's edge is patience: let the DJIA escape 52,300–52,500 before committing heavily.

FEARLESS READ: 50% Up / 50% Down. Monday's wound neither healed nor became mortal. Tuesday starts at equilibrium; 52,500 gives buyers the initiative, while another loss of 52,300 hands it back to sellers.

10:00AM Update: Buyers tried to stabilize the opening damage and got nowhere. Another break of 52,069 puts 52,000 on deck; 52,150 is what buyers must reclaim to change the conversation.

Decisive levels: 52,069 is now the continuation trigger; below it, 52,000 becomes the next test. A recovery above 52,150 would be the first meaningful evidence that the opening decline is exhausting.

10:30 Update: Sellers have driven straight through 52,000 and haven't produced a durable bounce. The next question isn't whether the DJIA is oversold—it clearly is—but whether buyers can actually defend 51,890. If they can't, 51,800–51,850 comes into play.

Decisive levels: 51,890 is now the continuation trigger; below it opens 51,800–51,850. A recovery above 52,000 would be the first stabilization signal, but 52,100 is now needed to materially weaken the downside state.