According to TA Securities, a sudden 50 basis point rate cut by the Federal Reserve could initially boost stocks in interest-rate-sensitive sectors like real estate and utilities, but it could also exacerbate concerns that the Fed believes the economic weakness is more severe than the market anticipates. This shift from a "soft landing" to a "hard landing" could dampen market sentiment and trigger a sharper correction, particularly in cyclical sectors like energy and industrials. Even the technology sector could face valuation pressures unless company earnings prove resilient.

TA Securities suggests that if the Federal Reserve holds interest rates steady and incoming data continues to weaken, the market could interpret this as a policy mistake. This scenario could prompt investors to shift toward healthcare and consumer staples stocks, leading to outflows from financial, industrial, and growth-reliant technology sectors. U.S. Treasury prices could rebound, while overall risk appetite could fade. (Jinshi)