S&P 500 Forecast: Stock Market Braces for Fed Decision and Earnings

Seagate Technology and NXP Semiconductors are both sharply higher on strong results and upbeat guidance. When semiconductor names move like that before the open, it lifts the whole sector and gives the Nasdaq something to lean on.

Oil Is Complicating Everything

June WTI crude oil is hovering near $100 a barrel. Spot Brent crude oil is above $114. Gasoline prices are climbing again and energy costs running this hot do not stay contained. They run through margins, through consumer spending, and straight into the inflation data the Fed is watching. This is not a background story today. Oil is sitting in the middle of the rate outlook and the rate outlook is sitting in the middle of every earnings call happening this week.

Powell’s Last Meeting and What Comes After

The Fed holds today. That is fully priced and there is no mystery about it. Inflation is still above target and the labor market is not weak enough to force a move. The vote will be nearly unanimous. What I am watching is the language.

This is almost certainly Jerome Powell’s final meeting as Fed chair. Kevin Warsh takes over next and he leans toward cuts, but he inherits an inflation problem that oil is making harder by the day. The rate cut trade is not as clean as it looked three months ago and Powell’s press conference will remind the market of that.

What I’m Watching

Two catalysts drive this market today and both land after the open. The Fed speaks this afternoon and four major tech names report after the close. Futures are telling you traders want to see both before committing. The setup is cautious and volatility is coming.

More Information in our Economic Calendar.