Wall Street traded slightly higher on Wednesday despite the Fed holding interest rates steady instead of a cut. Fed Chair Powell said the central bank does not need to be in a hurry to slash rates as the committee evaluates how President Trump’s tariffs will affect inflation and employment.
The Nasdaq ended at 17,738 (+0.3%) with the peak reaching 17,820. Key resistance at 18,000 held. Support is at 17,500.
The S&P 500 traded up to 5,654 while closing at 5,631 (+0.4%). Key resistance at 5,700 held. Support is at 5,600.
The Dow finished at 41,113 (+0.7%) after hitting a high of 41,266. Resistance at 41,250 was cleared but held. Support is at 41,000.
Earnings and Economic News
Before the open: ConocoPhillips (COP), Crocs (CROX), Peloton Interactive (PTON), Shopify (SHOP), Yeti (YETI)
After the close: Affirm Holdings (AFRM), Coinbase Global (COIN), DraftKings (DKNG), Marathon Digital Holdings (MARA), Trade Desk (TTD)
Economic news:
Initial Jobless Claims – 8:30am
Productivity and Costs – 8:30am
Wholesale Inventories – 10:00am
Technical Outlook and Market Thoughts
The major indexes have been rangebound this week as the second waves of resistance have been holding along with fresh support levels. Traders weren’t expected to place big bets ahead of the Fed meeting and why the action has remained somewhat choppy. Now that the event is in the rearview mirror, the action could pick up into the weekend between the bulls and the bears.
Just above the next layers of resistance are also the 200-day moving averages. With earnings season winding down, and the Fed in the background, trade deals, or lack thereof, will likely drive price action for the rest of the month.
The Nasdaq has basically traded in a 500-point range with yesterday’s low at 17,503. A close below 17,500 and the 50-day moving average would suggest a false breakout from last week with retest potential to 16,750.
Continued closes above 18,000 would be bullish for strength up to 18,300-18,600 and the 200-day moving average.
The S&P has dipped below 5,600 the past two sessions and has traded in a 125-point range with Wednesday’s low at 5,578. There is wiggle room down to 5,550 and the 50-day moving average with a close below 5,500 being a renewed bearish signal.
Key resistance is at 5,700-5,750 and the 200-day moving average.
The Russell 2000 fell back below key support at 2,000 and its 50-day moving average on Tuesday and were good clues this week might be a struggle. Wednesday’s low kissed 1,977 with backup support at 1,975-1,950 holding.
Resistance is at 2,025 followed by 2,075.
The Dow avoided a lower weekly low with yesterday’s bottom at 40,829. Key support at 40,500 has been holding since the prior Wednesday’s close above this level. There is risk down to 40,000-39,000 on a drop below 40,500.
Resistance is at 42,000 and the 200-day moving average followed by 43,250 which represents key support from late February.
The Volatility Index (VIX) has traded in a tight range since last Thursday and has been holding its 50-day moving average for the past seven sessions. Resistance is at 26-28 and levels that need to hold into the weekend.
The close back below 24 yesterday was slightly bullish as is starts to confirm a possible near-term market bottom. We mentioned, historically, the VIX trades around 20 so closes below this level and the 200-day moving average would be very bullish for the market.
The month of May still has a chance to turn super bullish but additional weakness and a close below fresh support levels could jeopardize last week’s rally.
