Market Analysis: Google Report Gives Positive Momentum to S&P 500 Price Ahead of Fed Decision


Yesterday, after the close of the main trading session, the reports of Microsoft and Google, one of the leaders of the AI-related boom, were published.

MSFT's share price fell more than 3% post-market as, despite Microsoft's Q2 performance for 2023 exceeding analysts' expectations, the company's forecasts for future periods turned out to be disappointing.

But the growth in the price of GOOG shares (in the postmarket) at the peak exceeded 7%. The company has demonstrated revenue growth in both search engines and YouTube and Cloud services, as well as through online advertising sales.

However, the main event of the week will take place today — namely, the news from the Fed at 21:00 GMT+3. Market participants are divided in their opinion: either the interest rate will be increased to 5.5% or remain unchanged at 5.25%. Also of great interest will be the words of Powell at a press conference at 21:30 GMT+3 regarding the rate of falling inflation, how much this will affect the current tight monetary policy.

Pending news from the Fed, trading volumes on the CME E-mini S&P 500 futures were well below average on Monday and Tuesday, but today there is likely to be a surge in volatility.

This morning the price of the S&P 500 index is near the highs of the year.

Possible resistance levels:

  • psychological level 4,600;
  • upper limit of the ascending channel (shown in blue).

Note the potential divergence between the price and the RSI indicator, which puts the S&P 500 in a vulnerable position for a pullback.

Support can be provided by the median line of the rising channel and its lower border, as well as the level of 4,460, which worked as resistance in June.

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