What Happened

  • Equities opened lower and stabilized late, still ending down on the day.
  • Credit spreads widened modestly as risk premium rose.
  • The dollar held gains while oil slipped.
  • Treasury yields remained elevated after the Fed.

What It Means

  • Risk assets are repricing to a slower path of cuts.
  • Wider credit spreads signal more caution from investors.
  • Commodity softness reflects the stronger dollar and tighter conditions.

What I Think

  • I expect a cautious tone until the next inflation data points arrive.
  • If credit spreads keep widening, equities will struggle to rally.
  • I am leaning defensive and keeping duration exposure limited.

Market Terms

  • Risk premium - Extra return demanded for holding risky assets.
  • Credit widening - Spreads rising on weaker risk appetite.
  • Policy shock - A market move driven by central bank messaging.