S&P 500, Nasdaq 100 Point Higher Ahead of Eagerly Awaited Fed Meeting

S&P 500, Nasdaq 100, Federal Reserve, Russia-Ukraine – Talking Points

• Stocks point higher as markets await pivotal Federal Reserve meeting
• S&P 500 remains pinned below 4,200, Nasdaq bounces from sub-13k

Markets look poised to recover from Monday’s losses as S&P 500 and Nasdaq 100 futures point higher. With the Federal Reserve set to raise the Fed Funds rate tomorrow for the first time since 2018, markets continue to remain on edge given the current macro slate. Russia-Ukraine tensions, rising energy prices, and now Covid lockdowns in China have complicated the path for risk assets. Despite this, both the Nasdaq 100 and S&P look higher early on Tuesday morning.

S&P 500 (ES) futures have fallen sharply over the last week following a test of the 4,313 level. Losses were capped by trendline support, which also marked the overnight lows below 4,140. Price currently remains trapped under the 4,200 psychological threshold, with a key pivot point just above at 4,212. It would appear that markets may remain headline-sensitive, while near-term direction could continue to depend on Russia-Ukraine developments and central bank policy. Tech shares may remain under pressure given the intent of the Fed to raise interest rates, which could suppress any S&P 500 advances given the construction of the index.

S&P 500 Futures (ES) 1 Hour Chart

Chart created with TradingView

Nasdaq 100 Futures (NQ) Chart

Chart created with TradingView

Nasdaq 100 futures bounced after a rough few sessions for the tech-heavy index, after falling nearly 1,000 points from Friday’s session highs. The outlook for growth stocks remains bleak, given the intent of central banks to remove accommodation and raise borrowing costs. That may continue to weigh on areas of the market that are dominated by speculative companies that are not free cash flow generative.

With the poke below 13,000 being bought right back up, NQ remains finely poised ahead of the Federal Reserve policy meeting on Wednesday. 13,100 has long acted as support for the index, and may come into play once again should the index pare premarket gains. Given the beaten down nature of the index over the last few weeks, traders should remain cautious. Should risk-on sentiment gain steam this week, 13,415 could be targeted as a first scalp for any longs.

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— Written by Brendan Fagan, Intern

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter