S&P500 correction looms

13 giu

The Fed has left us air on this year's rate cuts, and a weak majority of the Open Markets Committee is leaning toward a single cut, when in March there was a consensus for two. Powell has warned of the high level of uncertainty in the market to get carried away with the dot plot, a collection of economic, inflation, employment and interest rate forecasts obtained from the 12 Fed regions. The Fed remains uncertain about rates, but fortunately has not touched the current levels between 5.25% and 5.5%. And while they have agreed to a first rate cut, a second has not yet been fully ruled out. Basically, JPow is not getting wet and where he said I say, Diego says, since the institution is not sure of the current market situation, to take steps too far ahead. Although the Fed acknowledges modest progress towards the 2% inflation target, they continue to insist on the need for confidence to move to further cuts. Unemployment data and production indexes are not expected to be too positive, although the monthly production index is expected to be higher than the previous one.

S&P500 (Ticker AT: USA500) yesterday closed the session for the first time above 5400 points despite the Fed's expected policies. The S&P500 closed up +0.8% at 5,420 points after touching an intraday high of 5447.02. Nasdaq Composite closed up +1.5% and the Dow Jones Industrial Average closed down 35 points, -0.1%. Of note Oracle (NYSE:ORCL) rose +13% on the back of its partnership announcement with OpenAI and Google (NASDAQ:GOOGL) Cloud in its bid to extend its AI infrastructure, as well as showing a profit forecast for 2025. Rubrik (NYSE:RBRK) fell -8% despite the cloud data company showing an earnings beat. APPLE (NASDAQ:AAPL), meanwhile, continued its bullishness as it surpassed Microsoft (NASDAQ: MSFT) as the company with the highest market capitalization valuation after climbing +7% as it unveiled plans to delve deeper into AI.

On the other hand Bitcoin and the crypto sector have provided some gains causing shares of Coinbase (NASDAQ:COIN) , MicroStrategy Inc (NASDAQ:MSTR) and Marathon Digital Holdings Inc (NASDAQ:MARA) to close higher.

On the chart, the shape of the bell is very dispersed in three sub-bells, if we look at the current control point coincides with the current average zone is around 5,333 points. The RSI indicates that it is highly overbought at 72.65% and provides sell signals. The first support zone is located at 5,205 points and its second zone is located in the low zone at 4,963 points. It is not unusual for a correction to occur even though the market continues in its upward euphoria.

Ion Jauregui - ActivTrades Analyst





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