NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Stays Close To Historic Highs After Fed Decision

SP500

SP500 gains ground as traders react to Fed Interest Rate Decision and inflation data. Inflation Rate declined from 3.4% in April to 3.3% in May, compared to analyst consensus of 3.4%. Core Inflation Rate decreased from 3.6% to 3.4%, while analysts expected that it would drop to 3.5%. Fed left the federal funds rate unchanged and indicated that it expected federal funds rate at 5.1% by the end of 2024, which means that the central bank is ready for just one rate cut. PCE and Core PCE inflation forecasts were raised compared to March forecasts. Importantly, Fed raised the longer run estimate for the federal funds rate from 2.6% to 2.8%. Fed’s economic projections were somewhat hawkish, but traders stay bullish ahead of Powell’s press conference.

In case SP500 settles above 5450, it will head towards the psychologically important 5500 level. RSI is in the overbought territory, so the risks of a pullback are increasing.

NASDAQ

NASDAQ tests new highs as demand for tech stocks remains strong. Falling Treasury yields provide additional support to the tech-heavy NASDAQ index.

It should be noted that NASDAQ is close to the extremely overbought territory, so some traders may want to take profits off the table after the strong rally. In the near term, NASDAQ’s dynamics will depend on Powell’s comments during the press conference that starts in a few minutes.

Dow Jones

Dow Jones is mostly flat as most components of the index are moving lower. The continuation of Apple’s rally did not provide sufficient support to the Dow Jones index in today’s trading session.

In case Dow Jones settles below the 50 MA at 38,758, it will move towards the nearest support level at 38,500 – 38,550. On the upside, a successful test of the resistance at 39,000 – 39,100 will open the way to the test of the next resistance at 39,600 – 39,700.

For a look at all of today’s economic events, check out our economic calendar.