Stocks got run over by their own bond market, not by the Fed's decision itself.
The FOMC held rates at 3.50-3.75% as expected, but a 9-3 vote with three dissents pushing for a hike spooked the long end, sending 30-year yields above 5.2% for the first time since 2007 and the 10-year up 7bp to 4.67%. Layer on renewed Iran missile strikes on US forces and a Saudi counterstrike that pushed Brent above 90, and equities had nowhere to hide. The S&P 500 fell 1.5% to 7,316, the Dow dropped 2.2% for its worst day since April, and the Nasdaq slid 1.7%, with the Nasdaq 100 now roughly 10% off its June record and technically in correction as the semiconductor rout deepened alongside an 8% Kospi plunge that tripped circuit breakers twice.
SPX closed back below the 7,300-7,350 zone that's been acting as the gamma pivot all month, flipping prior support into overhead supply into tomorrow. Leadership was defensive: energy and staples were the only sectors green as oil spiked, while industrials got crushed (-3.4%) and tech fell 2.4%. VIX jumped over 13% to 20.66, confirming the flip out of the low-vol chop regime. After the bell, Meta gutted itself on a capex-driven earnings miss and soft Q3 guide, dropping close to 10%, while Microsoft rallied 3% on a 43% Azure beat.
The risk: Thursday's GDP, jobless claims and core PCE land into a market already repricing term premium, and if Meta's after-hours air pocket bleeds into the cash tape while Asia extends the chip selloff, the 7,300 flip breaks and momentum accelerates lower fast.