U.S. stock futures are lower after the Federal Reserve moved up their timeline for rate hikes at Wednesday’s FOMC meeting. The FOMC signaled two rate hikes in 2023 and raised its inflation target for 2021 to 3.4% for the year. However, Fed Chari Jerome Powell said the projections for future rate hikes should be “taken with a grain of salt” and reiterated that he believes that inflation is transitory. Meanwhile, the number of Americans filing new unemployment claims increased last week for the first time in more than a month. Initial claims for state unemployment benefits totaled a seasonally adjusted 412,000 for the week ended June 12.
The S&P 500 sold off after the FOMC meeting announcement and traded down to old support at 4197.59. The index did rally off that level, closing lower at 4223.70. There was a pick-up in the trading volume with 2,217,254,912 shares traded, and RSI closed lower at 55.44. Today, old support will now become new potential resistance, with the first level coming in at 4238.04. Possible support will remain at 4197.59, and a move below that level could bring in another round of substantial selling. So, the market needs to rally with above-average today to prevent a new downtrend from forming.
We are currently long-term bullish and short-term bullish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Windsor Wealth Planners & Strategist
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The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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