S&P 500 Index Little Changed As FOMC Decision Awaited

The S&P 500 index is marginally higher this Wednesday, as traders sit on the sidelines to await the decision of the Federal Open Market Committee (FOMC) of the US Federal Reserve later today. Apart from a 1% move of the Communications Services index, very little is happening with other sectors. 

Nordea Bank has presented its views on tonight’s decision. It expects the Fed to sugarcoat its tapering language but still deliver on a process that will conclude earlier than expected. Investors also want to see how the FOMC Chair explains recent inflation data showing an upward trend from previous months. Is inflation still “transitory,” or is something more concrete going on? 

Technical Outlook for S&P 500

The daily candle has tested support at the 4393.03 price mark, with a slight intraday bounce. If the FOMC delivers on an aggressive tapering schedule, we could see a breakdown of this support, opening the door towards 4368 initially. Other targets below this level include 4324 (16 July low) and 4275, with 4257 and 4220 coming into the picture if the correction is more extensive.

On the flip side, an extension of the bounce allows the index to challenge the all-time high barrier at 4422, with 4453 (100% Fibonacci extension from the 25 March swing to 7 May swing high) and 4561 (127.2% Fibonacci extension) serving as potential targets to the south. 

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S&P 500: Daily Chart

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