S&P 500 Price Forecast – Stock Markets Await the FOMC Results

The S&P 500 has fallen a bit during the trading session on Wednesday as we await the results of the FOMC meeting and perhaps even more importantly, the press conference. That being said, the market is likely to continue to see a lot of volatility as we are getting so close to the 4000 handle. The 4000 handle course is a large, round, psychologically significant figure, and it will attract a lot of attention. If we were to break above that level, it could kick off the next leg higher in a bigger move.

S&P 500 Video 18.03.21

This is all going to come down to whether or not the Federal Reserve is going to do something to control yields in the bond market. The bond markets have been selling off lately to spike yields, which of course works against stocks in the sense that there is a “risk free rate of return” simply by holding onto bonds. With this, it is very likely that the stock market will move inverse of whatever is going on in the bond market, as we have seen of the last several months. If Jerome Powell does nothing or does it even suggest that the Federal Reserve is willing to step in and buy more bonds, that could cause a bit of a short-term sell off. However, from the longer-term standpoint I think there are plenty of buyers underneath near the 50 day EMA looking to get involved. This could be the pullback that people have been looking for to pick up some value, but we also have to recognize that a move above 4000 becomes more of a longer-term situation.

For a look at all of today’s economic events, check out our economic calendar.