The market sold off sharply for the second day in a row. The Dow, which was reaching a 4-month high on Monday, is off more than 550 points during the past 48 hours. The latest Fed’s minutes were partly blamed on the afternoon sell off. However, it should be noted that there is really nothing new in the minutes. The Fed basically indicated that their rate cut campaign was over following the latest cut on April 30th while traders were expecting no rate change long before today’s release. In addition, the Fed also lowered its forecast for economic growth and increased the estimation for inflation rate and unemployment rate. But those should also come as no surprise given recent economic development and rising commodity prices. A $4 rise in crude price may be the real reason behind today’s weakness.

All major sectors ended the day in red. Defensive sectors such as utilities and healthcare were outperforming on a relative basis. Financials and commodities were among noticeable losers. The latter faced some profit taking despite a new high in the CRB commodity index, which jumped almost 8 points led by energies. The US dollar continued to slide against most major currencies. Treasuries dropped as investors tried to assess the latest inflation forecast from the Fed. The VIX index jumped for the second day but at 18.59, it remained too low to trigger a typical “capitulation” rally. Indeed, the market may be stuck in a trading range for the foreseeable future.