Fed Hikes Rates 25 Bps as All Three Indices Break Below Flips

The Federal Reserve raised interest rates by 25 basis points for the first time since 2023, as reported by Benzinga. The surprise hawkish shift sent Treasury yields soaring, with Benzinga filing that the 10-year yield reclaimed 5% following remarks from Warsh. On the tape, equity indices dropped sharply across the board. MT Newswires noted that tech stocks ended mixed to lower late in the afternoon, while Benzinga reported that the iShares Russell 2000 ETF fell heavily during Wednesday's trading session. The headline rate hike caught markets off guard, but the dealer map showed precisely how the selloff accelerated. Every major index sits firmly below its gamma flip tonight. SPY closed at 754.06, well beneath its flip level of 762.77 and sitting right above its put wall at 750. QQQ finished at 704.70 against a flip of 711.55, hanging above its 700 put wall. IWM took the heaviest hit, settling at 283.89 below its 292.67 flip, right on top of its put wall at 283. When spot sits below the gamma flip, dealer incentives reverse. Above the flip, market makers cushion volatility by buying dips and selling rallies. Below it, they are forced to sell into weakness and buy into strength to maintain delta neutrality. This short gamma regime acts as an accelerator rather than a stabilizer. SPY, QQQ, and IWM are all trading in an environment where dealer hedging moves with the trend rather than against it. Despite the intraday move, SPY remains inside its pricing parameters. Across my scored track record of 37 live-logged sessions, SPY has stayed inside its daily expected move 97.3% of the time against a 68% baseline. My historical backtest spanning 1,008 sessions from 2020 through 2023 shows a 74.2% containment rate. Positioned between the 750 put wall and the 760 call wall with short gamma active across all three tickers, dealers are set up to press moves rather than absorb them as the market digests the Fed's decision. I do not predict where price goes next, but the structure shows a wider expected range until spot reclaims the zero-gamma line.