S&P 500 Analysis: Worrisome Dynamics Ahead of Fed Decision

FXOpen

On the first of May, the US stock market turned out to be optimistic: the S&P 500 index exceeded the April maximum and approached the February maximum. The growth of the weekend was facilitated by the resolution of the crisis with the First Republic bank, which was bought by JPMorgan. According to former Treasury Secretary Larry Summers, most of the problems in the banking sector are over.

The opinion of Fundstrat analysts added to the positive. They indicated that the S&P 500 is up 9% YTD, has been in an uptrend for the past 7 months and has posted 2 quarters of growth in a row. This has never happened in a bear market, and according to the statistics, it is over. Analysts expect the index to return to highs at 4,750 by early 2024.

However… Yesterday, May 2, weak Job Openings data was published (actual – 9.59 million open vacancies, forecast – 9.74M, a month ago – 9.97M, a year ago – 11.5M). The sharp decline in supply in the US labor market led to a fall in stock prices and a rise in gold prices — presumably, investors preferred safer gold over stocks, as their fears of a recession intensified again against the backdrop of a weak labor market.

At the same time, the chart shows that the key resistance at 4170 continues to be relevant (as we wrote earlier, this level originates as early as 2022).

As a reminder, today we expect:

→ US release Fed interest rate decision at 21:00 (GMT+3)

→ Press conference US Federal Open Market Committee (FOMC) at 21:30 (GMT+3)

Get ready for bursts of volatility. Perhaps yesterday's bearish dynamics will intensify, and there will be no trace of the May Day positive.

This article represents FXOpen Companies’ opinion only, it should not be construed as an offer, solicitation, or recommendation with respect to FXOpen Companies’ products and services or as financial advice.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

forex

Index CFD Trading with FXOpen

Index CFD Trading with FXOpen

Experience ECN technology for deep liquidity and light-speed trade execution

  • Trade with tight spreads
  • Take advantage of zero commission
  • Choose from 4 trading platforms: MT4, MT5, TradingView, or TickTrader
Learn more

Latest articles

An Important Bullish Pattern Forms on the NIO Share Price Chart
Shares

An Important Bullish Pattern Forms on the NIO Share Price Chart

Today, the share price of NIO Inc. (NIO), a Chinese manufacturer of "smart" electric vehicles, is trading above $4 – a development that may be viewed as an optimistic scenario following the drop to $3 in the first half of April,

S&P 500 Chart Analysis Ahead of the Busiest Week of Earnings Season
Indices

S&P 500 Chart Analysis Ahead of the Busiest Week of Earnings Season

Despite the fact that President Trump’s earlier decision to impose tariffs (at higher rates than expected) shook the stock markets, the S&P 500 index (US SPX 500 mini on FXOpen) could still end April without significant losses

USD/CAD Consolidates
Forex Analysis

USD/CAD Consolidates

In the second half of April, the USD/CAD chart has shown a decline in volatility following significant spikes observed since February.

The Canadian dollar has stabilised against the US dollar within the 1.390–1.380 range over the

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.