S&P 500 Index at Risk Ahead of Fed and Big Tech Earnings

Summary:
• The S&P 500 index is hovering near its highest point since June 16th as investors wait for the latest interest rate decision by the Fed

The S&P 500 index is hovering near its highest point since June 16th as investors wait for the latest interest rate decision by the Federal Reserve and important quarterly earnings reports. The index is trading at $3,966, which is higher than this month’s low of $3,647, while the closely watched fear and greed index has risen to 35.

Busy week for the S&P

The S&P 500 index has bounced back in the past few days even as more American companies warn about the soaring inflation and its impact on their operations. Some top companies that have been warned are JP Morgan, Netflix, Snap, and Twitter. 

The primary catalyst for the S&P 500 index will be the upcoming interest rate decision by the Federal Reserve and more earnings. The Fed is expected to deliver another giant rate hike when it concludes its two-day meeting on Wednesday. Most analysts expect a 0.75% hike, while some expect a full percentage point. 

The S&P index will also react to the latest earnings by companies like Apple, Microsoft, and Google earnings that are scheduled for this week. These results will provide more information about the state of the American and global economy. But, most importantly, they will provide more information on the impact of the strong US dollar on earnings. 

The top companies that will publish their earnings on Tuesday are Coca-Cola, Fiserv, Raytheon Technologies, Archers-Daniels-Midland, Ecolab, Kimberly-Clark, and Moody’s, among others. 

S&P 500 forecast 

The four-hour chart shows that the S&P 500 index has crawled back in the past few days. Along the way, the index has formed an ascending channel shown in blue. The current price is slightly below the upper side of this channel. It is also slightly above the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) has moved slightly below the overbought level. 

Therefore, the index will likely retreat as sellers target the lower side of the channel at around $3,800. A move above the upper part of the channel at $4,055 will invalidate the bearish view.