In the last few weeks, the S&P 500 Index has made a big comeback as investors have bought into the fall after Donald Trump’s Liberation Day Speech. The S&P 500 Index, which tracks America’s largest companies, has risen to its highest level in over a year, reaching $5,685.
S&P 500 Index reacts to FOMC Decision
S&P 500 Index is expected to react in a positive way following the Federal Reserve’s latest announcement scheduled on Wednesday of this week.
The statement follows a mixed set of jobs data released by the US last week. On Tuesday, a report showed that the consumer confidence dropped in April. Many consumers were still worried about inflation and labor markets.
Consumers expect Trump’s tariffs to lead to higher US inflation. Recent data shows that Shein and Temu, for example, have increased their prices in triple-digits since the de minimis ended. The de minimis exemption exempted imports worth under $800.
A second report showed that US imports soared in March, as businesses prepared themselves for Trump’s new tariffs. The US economy contracted in the first three months of this year as a result of these imports.
Positively, the report released on Friday revealed that the job market is still healthy as the rate of unemployment remained unchanged at 4,2%. Analysts had predicted that the economy would add 177K new jobs, but it actually added more than that.
In this context, the Federal Reserve begins its meeting Tuesday. It will then announce its decision Wednesday. The bank is expected to keep interest rates the same, despite Trump’s pressure to reduce them.
The officials may be dovish by hinting at a rate cut in their next meeting, which will take place in May. Analysts expect at least three additional cuts in this year.
Earnings ahead
S&P 500 Index has also responded to US earnings. The majority of these were released last week. Apple, Amazon Meta Platforms and Alphabet are among the top companies that have published their financial reports.
Data from FactSet shows that earnings have been strong this year. The combined earnings growth for all companies has reached 12%, which is higher than anticipated.
Analysts believe these profits were temporary, as Trump’s tariffs did not make up the majority of them.
This week, many more companies from the S&P 500 Index will release their results. Most notable will be companies in the technology sector, such as Palantir and AMD.
Williams Companies, Ferrari and Unilever are also top picks this week.
Other catalysts for the S&P 500 Index include the growing hopes of a US-China trade agreement. Trump stated in a Sunday statement that he would be open to a deal at some point.
S&P 500 Index – Time to Sell the SPY ETF and Go Away?
S&P 500 Index Analysis
Daily chart shows that SPY Index is in a bullish rally for the last few months. The SPY Index has surged from $4,840, its lowest level, to $5,685, the highest since March 26,
As it shaped a V, the index jumped over the moving average of 50 days. The index has risen also above the 50 day moving average.
The Relative Strength Index and MACD are all pointing upward. Bulls will continue to target $5,778, which is the low swing of January 13, as the main resistance level. If the index moves above this level, it could lead to further gains up to $6,000
The top earnings forecast in this post S&P 500 Index ahead of FOMC Decision may change as the updates unfold.
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