US OPEN: All-time high and expectations ahead of the Fed

The session ahead of the Fed decision opened in very good spirits, and the S&P 500 reached its all-time high at 7,000 points. Over time, however, investors lost optimism, valuations slipped back toward the opening levels, and the market is clearly waiting for the Fed decision and the FOMC commentary.

Investors’ eyes are on the Fed. Maintaining current interest-rate levels is considered almost certain, while the FOMC statement after the decision will be of key importance. A variety of signals—often contradictory—are coming in from both the market and the economy. At the same time, valuations remain at record highs.

Volatility is also being driven by the earnings season, which is now fully underway. After banks’ results, it is time for technology companies to report. Europe’s ASML has already released its numbers, which may serve as a signal to investors regarding market sentiment. Despite strong results and optimistic guidance, the stock fell by around 2%. It is possible that reactions on the other side of the Atlantic could be similar.

US500 (D1)

Source: xStation5
On the chart, price briefly reached its historical maximum; however, buyers quickly lost momentum and pulled back below the highs from recent sessions. If sellers manage to regain control, the first major resistance level for a correction will be the 23.6% Fibonacci level.

Company news:

• Amazon (AMZN.US): The U.S. e-commerce leader announced it will lay off another 16,000 employees. The company indicates that this round of staff reductions will focus mainly on management and office roles.
• Texas Instruments (TXN.US): The analog-focused electronics manufacturer reported results. Although the company posted figures well below market expectations, the stock rose 8% on the back of extremely optimistic guidance.
• Eli Lilly (LLY.US): The pharmaceutical giant is undertaking a joint initiative to develop a gene therapy to treat hearing loss, in cooperation with Germany’s Seamless Therapeutic. The stock is down 2.5%.
• Starbucks (SBUX.US): Despite mixed results, the company’s CEO reassured investors about optimistic prospects for the coming quarters. The stock is up 2%.
• AT&T (T.US): The U.S. telecom leader beat investor expectations on both revenue and EPS. The stock is up 5%.