Nasdaq Index, Dow Jones, S&P 500 News: Benchmarks Slip Ahead of Fed’s Rate Policy Decision

Market Overview

The major U.S. stock index futures are retreating on Wednesday as investors awaited the Federal Reserve’s interest rate announcement. Tuesday witnessed a significant downturn, marking a losing month for all three major indexes.

At 11:45 GMT, Dow futures are trading 37921.00, down 72.00 or -0.19%. S&P 500 Index futures are at 5047.00, down 20.00 or -0.39% and Nasdaq futures are trading 17455.00, down 116.25 or -0.66%.

Market Performance

The S&P 500 dropped 1.57% on Tuesday, with the Nasdaq Composite and Dow Jones Industrial Average plunging 2.04% and 1.49%, respectively. April proved challenging for investors, with the Dow suffering its worst monthly performance since September 2022, shedding 5%. The S&P 500 and Nasdaq also experienced declines of about 4.2% and 4.4%, respectively, despite the former maintaining a 20% increase from its October low.

Key Earnings Highlights

Amazon surged 2% in premarket trading after surpassing expectations in first-quarter earnings and revenue. Operating income soared to $15.3 billion, while net income tripled to $10.4 billion. Conversely, Advanced Micro Devices stumbled 6% post-forecasting in-line revenue for the current quarter. Starbucks plunged 13% due to disappointing same-store sales, with China reporting an 11% decline, prompting a downward revision of its fiscal 2024 outlook. CVS Health also faced a 13% decline after missing earnings expectations and revising profit guidance.

Legal Settlement Impact

Johnson & Johnson announced a $6.5 billion settlement to resolve ovarian cancer lawsuits linked to its talc-based products, affecting thousands of claimants. However, pending litigation related to mesothelioma remains unresolved.

Market Anticipation

Traders are closely monitoring the Fed’s rate decision, with expectations of a steady interest rate. While policymakers may hint at future rate adjustments, market sentiment remains cautious amid lingering inflation concerns.

Forecast

As markets await the Fed’s decision, volatility is anticipated. Clarity on interest rate projections and economic data releases, including job openings and ADP’s private employment data, will likely influence market direction. Notable earnings reports from Qualcomm and DoorDash will further shape investor sentiment.

Technical Analysis

E-mini S&P 500 Index futures are in a downtrend according to the short-term and intermediate-term indicators.

The short-term range is 4963.50 to 5154.25. Its pivot at 5059.00 is controlling the near-term direction of the market.

On the upside, resistance is the 50-day moving average at 5183.00. If 4963.50 should fail as support, the selling could accelerate to the downside with the next target the 200-day moving average at 4814.00.