US stocks could see some volatility as traders become more cautious ahead of the Federal Reserve meeting.
The market was able to maintain a strong uptrend this year and could continue to do so if monetary policy expectations lean toward a softer stance.
While the Federal Reserve is expected to increase its interest rates today by another 25 basis points, traders will monitor Jerome Powell’s comments for hints about how monetary policy will evolve. Decreasing inflation has fueled hopes of an end to the hike cycle with this meeting potentially seeing the last rate increase.
George Pavel, General Manager at Capex.com Middle East told LondonLovesBusiness.com, “As a result, US stocks could come under pressure if the Federal Reserve goes the opposite way, signaling the possibility of other hikes.
“At the same time, traders could continue to monitor company earnings releases as the earnings season unfolds. In this regard, strong earnings in the tech sector could help keep the market on a strong footing despite the downward pressures ahead of the Fed.
“Major earnings releases are expected for the remainder of the week and could fuel volatility in addition to the impact of the Federal Reserve.
“Markets could also strongly react to the economic data releases regarding the US job market and US GDP growth tomorrow and inflation data on Friday.”