US OPEN: Wall Street indices gain, FOMC decision in the spotlight

• US indices launched today's session higher

• Dow Jones remains close to upper limit of downward channel

• PayPal gains as activist investor takes stake

Wall Street indices launched today's cash trading higher and extended upward move in the first minutes of trade. However, a lot may change later into the session in terms of sentiment as investors' eyes are turned to the FOMC decision in the evening. A strong hawkish message may dent moods and trigger reversal on stock markets.

Source: xStation5

Dow Jones (US30) is trading around 0.5% higher at the beginning of today's cash session on Wall Street. The index keeps trading close to the upper limit of the downward channel, below 32,150 pts resistance zone. Near-term  technical outlook for the index is bearish as failure to break above the channel calls for a move back towards the lower limit. However, a lot will depend on today's FOMC decision that is likely to trigger volatility spike on the global markets. Having said that, investors should keep on guard while trading today ahead of the US central bank decision. The aforementioned 32,150 pts zone is a near-term resistance to watch while 31,100 pts zone is a near-term support.

Company News

Shopify (SHOP.US) is taking a hit following the release of Q2 2022 earnings report. Company reported a 11% YoY jump in gross merchandise volume, to $46.9 billion (exp. €48.43 billion). Adjusted loss per share amounted to $0.03 while the market expected a profit of $0.03 per share. Revenue jumped 16% YoY to $1.30 billion (exp. $1.33 billion). As the company reported weaker results than expected in almost all key metrics, a drop in share price should not come as a surprise. Shopify also expects to report an operating loss for the second half of 2022.

General Dynamics (GD.US) reported Q2 2022 EPS at $2.75 (exp. $2.72). Revenue at $9.19 billion was more or less unchanged year-over (exp. $9.4 billion). Aerospace and Marine Systems units managed to increase revenue while sales at Technologies and Combat Systems units were lower than in Q2 2021. Free cash flow dropped 54% YoY to $435 million but was much higher than $243 million expected. 

PayPal (PYPL.US) gains following media reports on an activist investor taking a stake in the company. Dow Jones reported that Elliott Management is building a stake in PayPal but current or planned size of this stake remains unknown. It is said that Elliott wants to engage in activism at PayPal and speed up cost cutting measures employed at the payments company.

PayPal (PYPL.US) gains as Elliott Management takes stake. Stock launched today's trading with a big bullish price gap and tested $82.70 resistance zone. No upside breakout occurred and stock started to pull back. However, this pullback was short-lived and PayPal shares managed to fully recover from it already. Source: xStation5