Tech Optimism Tempers as Fed Meeting Looms

In the U.S. futures market, evening trading on Monday saw minimal movement, with concerns surrounding an upcoming Federal Reserve meeting overshadowing some optimism fueled by developments in the technology sector driven by artificial intelligence (AI). While despite a rebound in technology-heavy Nasdaq during regular trading hours, aftermarket trade witnessed a reversal for major tech stocks, including NVIDIA Corporation, despite unveiling its latest line of highly anticipated AI chips named Blackwell.

Wall Street's major indexes closed higher on Monday, mainly driven by gains in tech stocks, particularly with Alphabet Inc. surging 4.6% following reports of potential collaboration with Apple Inc. to integrate Google's Gemini AI into iPhones. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all experienced gains, with Tesla Inc. seeing a 6% jump due to plans to increase prices for some European models. However, Tesla fell in aftermarket trade amid overall market anxiety over the pending Federal Reserve meeting, expected to provide insights into interest rate decisions.

Concerns over potentially hawkish messaging from the Federal Reserve, despite expectations of unchanged interest rates, have kept Wall Street on edge, particularly with U.S. inflation maintaining a persistent trend. Stock buybacks among S&P 500 companies surged in the fourth quarter, led by Apple, although overall buyback figures for 2023 were slightly lower compared to the previous year.

On Monday, the Philadelphia Semiconductor index ended the day nearly unchanged, while the S&P 500 technology index saw a modest uptick of 0.5%. However, sectors sensitive to interest rates, such as real estate and healthcare, experienced marginal declines.

According to Morgan Stanley strategists, despite the ascent of U.S. stocks amid increasing Treasury yields, equities could grow more sensitive if yields continue to rise. They emphasized that a 10-year U.S. Treasury yield reaching 4.35% would be a crucial level to monitor, potentially indicating increased sensitivity of stocks to rates.

The upcoming Federal Reserve meeting, along with meetings by the Bank of Japan and Bank of England, will dominate market attention this week. Traders are eager for insights into the central bank's stance on rate cuts, economic resilience, and inflation, amid recent hotter-than-anticipated U.S. producer and consumer price data.

Data for Technical Analysis (5H) CFD US30 DJIA

Resistance : 38804.3, 38818.4, 38841.1

Support : 38758.9, 38744.8, 38722.1                       

5H Outlook  

Source: Investing.com                    

Buy/Long 1 If the support at the price range 38708.9 - 38758.9 is touched, but the support at 38758.9 cannot be broken, the TP may be set around 38804.5 and the SL around 38684.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 38804.3 - 38854.3, TP may be set around 38870.0 and SL around 38734.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 38804.3 - 38854.3 is touched, but the resistance at 38804.3 cannot be broken, the TP may be set around 38745.0 and the SL around 38879.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 38708.9 - 38758.9, TP may be set around 38678.0 and SL around 38829.0, or up to the risk appetite.       

Pivot Points Mar 19, 2024 02:27AM GMT