U.S. Stocks Hit Record Highs Ahead of Fed Decision

On Monday, U.S. stocks closed higher, led by gains in Utilities, Oil & Gas, and Consumer Services sectors. The S&P 500 and Nasdaq reached new record highs on Monday, driven by gains in the technology sector, just before the Federal Reserve's interest rate decision and upcoming inflation data. However, strong May jobs data initially pressured stocks, pushing the 10-year Treasury yield up by over 15 basis points.

Southwest Airlines (NYSE:LUV) shares surged 7% after Elliott Investment Management revealed a $1.9 billion stake, aiming to improve the airline's performance. Nvidia (NASDAQ:NVDA)  shares rose 0.7% following a stock split, suggesting potential inclusion in the Dow, while AMD (NASDAQ:AMD) dropped over 4% due to a downgrade by Morgan Stanley. Conversely, Apple (NASDAQ:AAPL) shares fell nearly 2% despite unveiling an AI platform at its developer conference.

On the other hand, Huntington Bancshares Incorporated (NASDAQ:HBAN) fell over 6%, affecting regional banks and the broader financial sector, after revising its net interest income forecast downward. Other regional banks, including Regions Financial Corporation (NYSE:RF), PNC Financial Services Group Inc (NYSE:PNC) and KeyCorp (NYSE:KEY), also saw declines.

The Q1 reporting season is almost complete, but significant earnings reports are still expected this week. The most anticipated reports come from Oracle Corporation (NYSE:ORCL), Broadcom Inc (NASDAQ:AVGO), and Adobe Systems Incorporated (NASDAQ:ADBE). These reports are crucial not only for their individual performances but also for insights into the AI sector, which is a major driver of US equities.

The June Federal Open Market Committee (FOMC) meeting is scheduled for Wednesday, concluding with a statement and a press conference by Chair Jerome Powell. Key economic data releases this week include the Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) report on Thursday. The Fed is anticipated to keep interest rates steady but will release updated economic and policy projections, with investors seeking indications of when rate cuts might start.

U.S. stocks, especially the S&P 500, have risen over 12% year-to-date, driven by hopes that the Fed can manage inflation without stalling growth. However, conflicting economic data, such as a strong jobs report versus a slowdown in manufacturing and revised lower first-quarter growth, complicate the stock market and trading outlook.

Data for Technical Analysis (1H) CFD US30 DJIA

Resistance : 38814.8, 38819.9, 38828.2

Support : 38798.2, 38793.1, 38784.8                       

1H Outlook

Source: TradingView                    

Buy/Long 1 If the support at the price range 38788.2 - 38798.2 is touched, but the support at 38798.2 cannot be broken, the TP may be set around 38814.8 and the SL around 38783.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 38814.8 - 38824.8, TP may be set around 38840.0 and SL around 38793.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 38814.8 - 38824.8 is touched, but the resistance at 38814.8 cannot be broken, the TP may be set around 38792.7 and the SL around 38830.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 38788.2 - 38798.2, TP may be set around 38760.0 and SL around 38820.0, or up to the risk appetite.       

Pivot Points Jun 11, 2024 01:54AM GMT

Sources: Investing 1, Investing 2