The S&P 500 index (US SPX 500 mini on FXOpen) has recovered following Monday’s sharp decline, which was triggered by the success of Chinese startup DeepSeek and its AI model. As of this morning, the index is trading above the week’s early high.

This resilience suggests that the stock market has stabilised ahead of the Federal Reserve’s decision, scheduled for today at 22:00 GMT+3. Interest rates are expected to remain unchanged, but the key question is what stance Fed Chair Jerome Powell will take now that Donald Trump has officially assumed the U.S. presidency. Trump has already stated at the Davos forum that interest rates should be lowered. Powell’s press conference is set for 22:30 GMT+3.

Technical analysis of the S&P 500 index (US SPX 500 mini on FXOpen) shows that the price is approaching the 6,100 level for the third time. The first two attempts to break above this level (marked with red arrows) were unsuccessful.

From a bullish perspective:
→ The long-term trend remains upward, as indicated by the moving average.
→ A successful breakout above 6,100 could turn this level into strong support, similar to how 5,660 acted previously.

However, it is also possible that:
→ Powell’s remarks today will be more hawkish than expected.
→ The market may react negatively.
→ The price could make a bearish move, reinforcing the relevance of the downward channel (marked in red).

Prepare for heightened market volatility this evening.

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