S&P 500 steadies near record as Fed decision looms

Highlights

- S&P 500 closed at 6,615, marking a fresh record high before Fed’s rate decision.

- Traders expect a 25-basis-point cut, with Powell’s tone guiding the next move.

- Tesla jumped 3.6% while Nvidia slipped on Chinese antitrust scrutiny.

S&P 500 index remains inside a rising channel, with immediate support at the 20-day EMA near 6,491. The 50-day and 100-day EMAs at 6,373 and 6,210 provide additional layers of protection, while the 200-day EMA at 6,009 reinforces the longer-term uptrend.

S&P 500 price dynamics (Source: TradingView)

Momentum signals remain strong, with the RSI at 69.7, approaching overbought levels but not yet flashing reversal signs. A breakout above 6,620 could accelerate gains toward 6,700. Conversely, losing support at 6,490 would risk a corrective pullback into the 6,370–6,400 zone.

Fed policy and macro backdrop

The Federal Reserve’s decision on Wednesday is the week’s defining event. Markets are pricing in a 25-basis-point cut, the first since December, with traders awaiting Powell’s guidance on whether further easing lies ahead. Softer inflation readings and cooling labor data support a dovish stance, while any hint of conditional easing could temper risk appetite.

The dollar’s weakness and lower Treasury yields have also bolstered equities, particularly in rate-sensitive sectors. Political optimism added fuel after President Donald Trump suggested progress in U.S.-China trade talks, easing near-term geopolitical risks.

Corporate catalysts highlight divergence

Stock-specific news also shaped Monday’s session. Tesla climbed 3.6% after Elon Musk disclosed a nearly $1 billion stock purchase, his largest open-market buy to date, signaling confidence in the EV maker’s trajectory. Nvidia slipped 0.04% after Chinese regulators accused the company of violating anti-monopoly laws, a reminder of regulatory headwinds that remain a risk for high-profile tech names.

These divergent moves underscore how corporate catalysts are interacting with broader macro conditions to drive sector rotations within the index.

Outlook and risks

The S&P 500’s trajectory remains constructive, with policy easing expectations, resilient earnings, and abundant liquidity providing support. However, stretched technicals and elevated valuations suggest the possibility of a near-term pullback. A correction toward 6,500 would remain consistent with the broader uptrend, but a decisive break below 6,373 could mark the start of deeper consolidation.

Previously, we noted the index’s ability to hold near 6,584 despite policy uncertainty. This week’s Fed decision will be pivotal in determining whether the rally extends toward 6,700 or consolidates within its channel.

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