SPX: geopolitics, Fed, inflationDuring the previous week the S&P 500 was moving in a mixed manner. The trading range was between levels 6.039 and 5.967 where the index is closing the week. Traders and investors had quite a lot of topics to cover in order to decide which side should be traded. The tensions in the Middle East were one of them, continuing for the second week in a row. The FOMC meeting was held, with the Fed holding interest rates steady, for another meeting. Still, the Fed continues to count with two rate cuts till the end of this year. The Fed expects that implemented trade tariffs by the US Administration might affect short term inflationary pressures, but it should be a one-off effect. Some positivity for markets came from the statement of the Fed Governor Waller, who noted that the Fed might make the first rate cut in July. On the opposite side was San Francisco Fed President Mary Daly, who noted that she would be more confident to cut rates, after she is certain that the trade tariffs would not make a significant impact on inflation.
Uncertainty still holds on markets, especially after news posted by the Wall Street Journal, noting that the U.S. might cancel technology waivers, impacting some chipmakers. The tech companies involved in the semiconducting business dropped in value. Friday's trading session Nvidia ended by 1,12% lower, AMZN also closed the week with a drop of 1,33%. This week on the opposite side was Apple, with a gain of 2,25%.
As long as uncertainty shapes investors sentiment, the market will lack optimism. The volatility on the US equity markets might continue, with possibly negative trends. The week ahead brings the PCE data as well as Fed Chair Powell`s testimony in front of the Congress, in which sense, the volatility will most certainly hold.
