Relevance up to 07:00 2022-07-26 UTC–4
US stock index futures rose on Monday morning after ending last Friday on a minor note. Traders are preparing for the busiest week of corporate reports, as well as for the Federal Reserve meeting and new benchmarks for raising interest rates. Dow Jones Industrial Average futures rose 156 points or 0.5%. S&P 500 futures also gained 0.5%, and Nasdaq 100 futures jumped 0.4%.
On Friday, the main pressure on the market was due to the weaker-than-expected earnings of Snap, which led to a drop in shares of technology companies. Traders also recorded profits after fairly steady growth during the week. Nevertheless, all three indexes closed the week with growth: the Dow Jones rose 2%, the S&P 500 rose 2.6%, and the Nasdaq closed the week up 3.3%.
It is worth noting that this was the second week of the last three, which closed in the black. The S&P 500 is struggling to return after crossing the bear market level. The index has grown by more than 8% from the lows of 2022 and has been trading near the maximum since the beginning of June.
As I noted above, the demand for risky assets is gradually returning, as in general, corporate reports for the 2nd quarter exceed the forecasts of economists, making Wall Street think about the question: Has the bear market found the bottom or not yet?
The market’s attention has also shifted from concern about inflation to concern about the further growth of the stock market and risky assets. As of Friday, about 21% of S&P 500 companies reported earnings. According to FactSet, almost 70% of them exceeded analysts’ expectations.
This week, major tech giants such as Alphabet, Amazon, Apple, and Microsoft will report. It is also worth noting that a meeting of the Federal Reserve System on monetary policy will be held on Wednesday. Economists expect an increase of three-quarters of a point. If everything goes as predicted, there will be a chance for the stock market’s continued growth and risky assets.
As for the technical picture of the S&P 500
The bulls are aimed at continuing the upward rally today. For this reason, we need to defend the nearest support of $ 3,975 with all our might. The focus will continue to shift to the resistance at $ 4,013, which failed to get above it last week. Above this level, we will see a fairly active growth of the index in the $ 4,000, where large sellers will return to the market again. At least there will be those who want to fix profits on long positions. A more distant target would be the $ 4,089 level. In the event of a return of the pressure generated due to weak corporate reports, buyers will have to defend the nearest support levels of $ 3,975 and $ 3,945, the breakthrough of which will push the index back to $3,905. Having missed this level, the index will sink to $ 3,835. A little lower, there is a more stable level of $3,801, where buyers will again begin to act more aggressively.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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