Call it a Fed Day for the books.
The Federal Reserve met Wall Street's expectations and cut rates by a quarter of one basis point in its meeting on Wednesday, putting through the first decrease in its benchmark interest rate since 2008. The central bank also said it would halt its balance sheet reduction program two months ahead of schedule.
Stocks fell on the announcement, with the S&P 500 and Dow Jones Industrial Average posting their worst one-day performance since May. The biggest declines took place after Fed Chairman Jerome Powell indicated that Wednesday's cut did not mark the start of a rate-cut cycle.
For Wall Street veteran Art Hogan, chief market strategist at National Securities, "a lot of what was done today was as symbolic as it was functional," he told CNBC on Wednesday.
"Functionally, going from 2.25% to 2% [on the Fed's benchmark rate] is not something that's going to remarkably change the dynamic, but it also is symbolically sending a signal: 'Hey, rates are lower, and we're willing to move if the global economy is slowing down because of the trade war,'" Hogan said in a phone call with CNBC.
As for the balance sheet move, Hogan took it as a signal from Powell that "he's willing to use the balance sheet again" in the case of an economic slowdown. The sooner-than-expected end to the roll-off left the Fed with $3.6 trillion in its pocket.
In all, "I think there were great expectations built into what the Fed was going to deliver today that got beyond the realm of reasonable, and the Fed delivered something that was reasonable," Hogan said.
Now that the rate cut is out of the way, it's time to focus on other critical, market-moving issues at hand such as earnings and the ongoing U.S.-China trade dispute, Hogan said earlier Wednesday on CNBC's "Trading Nation."
"In the here and now, there's uncertainty," the strategist said. "We're seeing that show up in manufacturing. We're certainly seeing that show up in industrial companies talking about complex supply chains, being uncertain about making decisions. So, there are decisions that are not being made because of the trade war. That's a problem now."
Still, Hogan said he doesn't see a reason for investors to exit the market just yet, calling it "a market you can stay in" provided the trade war doesn't escalate.
"I think the market is fine with the status quo as long as we don't get that escalation, and there's no guarantee we won't," he warned. "The rhetoric changes from the White House every day on where we are, and it feels as though the administration is fine with taking this battle all the way into the election cycle. That's going to be too long, and the market will start to take notice."
But, with two particular areas of the market — the popular, growth-oriented technology stocks and the defensive names — seeing huge interest from investors, Hogan recommended sticking to plays within the groups not getting as much love.
"Everything that's not momentum and everything that's not defensive like staples and [real estate investment trust]s probably looks the most attractive, and the market is going to be able to recognize that," Hogan said. "When we start to look at financials, we start to look at consumer discretionary and some of the midcycle industrial names, [they] will probably look a whole lot more attractive in the next few months than they have in the last couple of months."
