NASDAQ Index, SP500, Dow Jones Analysis – Traders Are Cautious As They Wait For Fed’s Comments

SP500 140623 Daily Chart

SP500 is mostly flat as traders wait for the Fed decision. The Fed is expected to leave the interest rate unchanged, and traders will focus on Powell’s comments. Today, traders had a chance to take a look at Producer Prices data, which showed that PPI declined by 0.3% month-over-month in May. Core PPI increased by 0.2%, in line with the analyst consensus. The recent inflation data shows that the Fed may have an opportunity to be less hawkish, but it remains to be seen whether Powell will send a signal that federal funds rate will also remain unchanged in July.

RSI remains in the overbought territory, although it has started to move lower. High RSI increases the probability of a pullback, but technical factors will take a back seat today as traders will focus on Powell’s comments.

NASDAQ 140623 Daily Chart

NASDAQ continues to move higher amid strong demand for tech stocks. The index failed to gain strong momentum today, which is not surprising as traders are not ready for big moves ahead of the Fed decision.

NASDAQ is also overbought so if the Fed is more hawkish than expected, a sell-off may follow.

Dow Jones

Dow Jones 140623 Daily Chart

Dow Jones pulled back as traders took some profits off the table ahead of the Fed decision.

It should be noted that Dow Jones is at risk of breaking the upside trend. A move below the 34,000 level would push Dow Jones towards the support area around the 33,800 – 33,900 range.

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