September 16, 2026
Fed Hikes 25 bps — QQQ Capped Under the 50-Day SMA
The Federal Reserve just delivered its first rate hike since July 2023, lifting the federal funds target range by 25 basis points to 3.75%-4.00% in a unanimous 12-0 vote.
This was not a surprise in isolation. The market had priced a hike in after hotter inflation data and rising energy costs, but the context makes it critical. After an extended pause, the Committee explicitly cited “elevated” inflation and said the move would support a “timelier return” to the 2% goal. Updated projections still leave another hike later this year on the table for a majority of participants.
For QQQ, that is a regime change. Higher policy rates raise the discount rate applied to future earnings of the Nasdaq-100’s high-duration names. Combined with sticky inflation, resilient growth, and geopolitical uncertainty, the Fed is telling markets it will prioritize price stability even if that means tighter financial conditions. That mix has historically weighed on multiple expansions and kept risk assets vulnerable until the new policy path is fully digested.
Today’s Tape: Bearish First Impulse, Weak Late Recovery
The QQQ opened at $708, traded as high as $711.85, sold down to $700 after the decision, and closed at $704.72. That is a bearish first impulse with only a modest bounce into the close. The late recovery took some of the sting out of the headline, but it did not repair the structure. Price finished the session still rejected under the 50-day SMA. Treat today as FOMC day one, not the finished move.
The first session after a Fed decision is often a digestion phase: algorithms fade the 2:00 p.m. ET print, short-covering appears into the close, and the tape can look “not that bad.” The real follow-through more often arrives on day two, once the statement, the dots, and the press conference have been fully absorbed, and positioning has to live with the new rate regime. Tomorrow, we will be more certain whether today was noise or the start of the next leg, which, as of now, looks like it will be lower.
Daily Chart Technicals: Stuck Under the 50 SMA
The daily QQQ chart is still the cleanest expression of the problem. After the June high near $748.65, price sold off, found a base in the mid-to-high 670s in late July, and staged a recovery. That bounce ran into the flattening 50-period moving average, which is the prominent yellow line on the chart, and has now failed to reclaim it on a closing basis. Price is below the 50 SMA, and the SMA itself is flattening rather than rising. While I’ve been eyeing a breakout for quite some time, this macro tailwind could end up being the bearish catalyst that breaks this trend, especially on a break of the key psychological level at $700.
In short, QQQ is range-bound and capped. Until the 50 SMA is reclaimed, the path of least resistance remains sideways-to-lower.
Sentiment: Put/Call Is Too Low for a Low
A solid index low usually requires fear. That shows up as elevated put buying after the damage is obvious. That is not what the options market has been giving us. The latest official CBOE equity put/call print going into this decision was 0.56 on September 15, after 0.67 the prior day. That is complacent, not capitulatory. Readings in that neighborhood say the crowd is still more interested in calls than in insurance. You rarely put in a lasting low in the indexes while that ratio is still this low. Fear has not been paid for yet.
Until put/call rises and price reclaims the 50 SMA, treat today’s bounce as short-covering and end-of-day positioning, not as evidence that sellers are done.
What I’m Watching
Three things are stacked in the same direction, which is why the near-term bias is slowly shifting:
- Policy regime change. This was not a hold. It was the first hike since 2023, with inflation still described as elevated and another hike still possible. Growth multiples in QQQ do not like that shift.
- Technical breakdown. QQQ remains stuck under the 50-day SMA for 3 sessions now, after failing to reclaim it. The late bounce did not fix that.
- Lack of leadership. When the index tries to recover from a Fed-day low and the generals do not experience a swift relative-strength bounce, it makes it harder for the index to recover.
Tomorrow’s session is the tell. Day two after the Fed is when follow-through usually declares itself.
The Hedge
Given the location below the 50 SMA, the hawkish tilt, the weak late recovery, and a put/call ratio too low to mark a durable low, I shifted to a defined-risk downside hedge today. While I was eyeing potential shorts in September, I haven’t taken one until now. I put on a small hedge in the Mastering the Trade room. That is aligned with the chart. It is not a crash call. It is payment for protection, while price is rejected at the line that matters, and while the new rate regime is still being digested.
Ultimately, I’m still a Nasdaq bull, but the technicals, combined with this change, will likely take a few days to digest. After that, I will see if I’m able to load up on pre-earnings momentum longs as we get closer to October. Perhaps the Fed decision, and what will hopefully be only a short-term breakdown, will give me a better entry.
