Aside from the performance of a national currency, a popular yardstick by which to gauge anticipation or reaction to an economic event or announcement is the market sentiment surrounding the top listed stocks on premier exchanges.

Today, as market participants around the world await the release of the minutes from the FOMC meeting that took place at the end of January, the S&P 500 index will begin trading slightly lower, an interesting movement considering that for the past three months, this premier index which includes the most prestigious and highly capitalised publicly listed companies listed on US exchanges, has been rallying.

Since the end of October, only a few minor dips have taken place. However, the tailing off which took place during the New York trading session yesterday places the S&P 500 under the 5,000 point mark when the market opens in New York today.

On February 19, the S&P 500 finished the trading day (Eastern Standard Time) at 5,008.7, according to FXOpen charts and will begin the trading session today at 4,973.6, which is its closing price yesterday.

There is some degree of speculation as to whether the FOMC minutes will provide any indication of the Federal Reserve Bank's potential view toward reducing interest rates, however considering that a far higher level of speculation abounded at the beginning of this year with so many market analysts adamant that rates would be lowered twice before the end of the summer in the United States when in reality the Federal Reserve had not given any such signal and then categorically announced that it was not planning to reduce rates in the near future.

Therefore, there are other factors likely being considered by investors, and an overall conservative path is being trodden, especially when considering that not only the S&P 500 dipped below the 5,000 mark at a time when it was previously rallying - let's remember that the S&P 500 index had a bumper year in 2023, having risen by 24% across the entirety of the year.

Compare that to its counterpart across the Atlantic, and the success is even more amplified, as London's FTSE 100 only gained 3.8%, which was its best in three years but absolutely disastrous compared to all other major listed global markets. In 2024, FTSE 100 trails behind the stellar performance of the S&P 500, so this minor pessimism toward an otherwise confidence-inspiring market in the run-up to the FOMC minutes announcement is particularly interesting.

To add to this, the US Dollar is slightly down, too.

If the FOMC minutes do not contain any such information about interest rate decreases, large corporations would perhaps look to postpone any growth ambitions until further notice from the FOMC because capital required to service current borrowing is high when interest rates are high. If they are reduced, this frees up capital for either holding a higher 'cash at bank' reserve which leads to a healthier balance sheet, or to reinvest in growth, both of which would lead to greater investor appeal.

The FOMC has been clear that it does not want to amend the monetary policy until it is absolutely certain that inflation is heading toward the target of a sustainable 2%. Therefore, a pragmatic approach may well be taken by investors.

It will no doubt be of great interest to consider the potential market movements if no amendment to policy is mentioned in the meeting minutes, and investors will perhaps have to begin to look at other metrics by which to measure the movements of major currencies and listed equities.

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