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30.01.2025 09:14 AM
Stock Market: S&P 500 and NASDAQ Resume Growth Following Yesterday's Fed Decision

Futures on European and U.S. indices rose following Asian markets as traders anticipate a dovish decision from the European Central Bank, especially after the Federal Reserve left its policy unchanged yesterday.

The Euro Stoxx 50 and S&P 500 futures gained 0.3% each, the NASDAQ added around 0.2%, while the Dow Jones showed no significant movement. These gains followed a slight uptick in Asian indices, although liquidity remained low due to the Lunar New Year holidays that closed many major stock markets in the region.

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Yesterday, the Federal Reserve decided to keep interest rates unchanged, sending an important signal to financial markets. Investors viewed this as an indication of economic stability, which boosted demand for riskier assets. This assurance that the Fed is not hastily moving to ease monetary policy has supported stock prices and strengthened the cryptocurrency markets. The current interest rates create favorable conditions for affordable borrowing, which in turn stimulates consumer spending and business investments.

However, mixed earnings reports from International Business Machines Corp., Meta Platforms Inc., Microsoft Corp., and Tesla Inc. triggered volatility in the stock market, prompting investors to focus on regional events for trading opportunities during the Asian session.

As I mentioned earlier, today's European Central Bank meeting is expected to lead to a 25 basis point rate cut, as the central bank intensifies efforts to stimulate the sluggish Eurozone economy. This decision would extend the aggressive easing cycle that has already included four rate cuts in 2024. A dovish stance from the ECB could further support the overheated European stock market while simultaneously weakening the euro. Economists warn that without decisive action, the Eurozone may experience a continued decline in consumer demand, which could negatively impact the manufacturing sector and result in persistent economic stagnation.

In the AI space, SoftBank Group Corp. shares rose after reports surfaced that the company is considering an investment of up to $25 billion in OpenAI, its partner in the Project Stargate joint venture. This news provided some relief in the fintech sector, leading to a positive market reaction.

Oil prices stabilized, as investors await clarity on U.S. trade policy plans following comments from the new Commerce Secretary nominee, who suggested that Canada and Mexico might avoid tariffs.

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In terms of the technical outlook for the S&P 500, demand remains strong. The primary objective for buyers today will be to overcome the immediate resistance at $6058. Achieving this will support the ongoing upward trend and create an opportunity to reach a new level at $6069. Furthermore, maintaining control over $6079 is crucial for the bulls, as it will reinforce their positions. Should there be a downward movement due to a decline in demand and risk appetite, buyers must make their presence felt around $6047. A breakout below this level could quickly bring the trading instrument down to $6038 and potentially open the path to $6024.

Jakub Novak,
Analytical expert of InstaForex
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