S&P 500 Tests Resistance At 4040 Ahead Of Fed Rate Decision

Trading bets on a less hawkish Fed help the S&P 500 gain ground.

While traders get ready for today's publication of the Fed Interest Rate Decision, the S&P 500 is rising. The technologically oriented NASDAQ Composite is up 0.3%. After yesterday's CPI statistics, the market sentiment is still upbeat.

A decrease in the demand for safe-haven assets is highlighted by the U.S. dollar's recent trading around multi-month lows. If the Fed continues to take a hawkish position, though, the scenario may swiftly shift.

Currently, traders anticipate that the Fed will announce that, in order to safeguard the economy, interest rates would rise gradually starting in 2023. Recent inflation statistics showed that the Fed's rapid rate rises are having the desired effect, but it is unclear if the Fed would adjust its policies in response to the data.

Trading activity indicates that markets have begun to reflect a less hawkish Fed. As a result, the S&P 500 will be very sensitive to any remarks that may be seen as being hawkish.

The market's response, which will occur after the Fed publishes its announcement, should be noted by traders since it won't be the final one. During the press conference, which will begin 30 minutes after the release of the statement, the S&P 500 will also respond to Powell's remarks.