Market Analysis: Will Stock Prices Soar Higher or Are They Already Priced In?
Yesterday, the S&P 500 Index reached a new record high of 5,670.81, surpassing the previous peak from July 16 before closing just 0.03% higher. Today’s focus is on the FOMC rate decision, set for 2:00 p.m., followed by a press conference at 2:30 p.m. The index is expected to open flat and may consolidate ahead of the Fed release, potentially increasing market volatility.
Nasdaq 100 Continues to Fluctuate
The Nasdaq 100, a tech-focused index, gained 0.05% yesterday after a 0.5% decline on Monday. It continues to fluctuate near the 19,500 level, remaining weaker than the broader market. This morning, the Nasdaq 100 is expected to open 0.1% higher but still below previous record highs.
VIX: Market Fear Indicator
The VIX, which measures market fear, reached a local high of 23.76 recently, indicating elevated fear among investors. However, a stock rebound last week pushed the VIX lower, remaining below 18. Historically, a dropping VIX indicates less fear in the market, while a rising VIX accompanies stock market downturns.
S&P 500 Futures Contract: Sideways Movement
The S&P 500 futures contract is trading around the 5,700 level, with support at 5,680-5,700. Volatility is expected to increase post-Fed release, potentially signaling a short-term market top.
Conclusion: What to Expect Next
Stock prices are likely to open flat today, with all eyes on the Fed’s rate decision. A “buy the rumor, sell the news” scenario is possible, but a bullish breakout cannot be ruled out. The short-term outlook remains bearish, with potential for increased volatility in the market.
In my Stock Price Forecast for September 2024, I noted significant volatility in August, with a roller-coaster ride leading to a consolidation near the record high. The sharp reversal suggests more volatility in September. I maintain a bearish outlook for now.
Breakdown of Analysis
- The S&P 500 reached a new record high, surpassing its previous peak.
- Investor focus is on today’s FOMC rate decision.
- The short-term outlook remains bearish, with potential for increased market volatility.
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