Markets Price in Fed Rate Hike by September

The expectation of a Fed rate hike typically creates a negative environment for equities. GOOGL's RSI is near 45, close to the lower end of the neutral zone, and the price is trading below its 20-day moving average. The MACD remains below the signal line, indicating short-term weakness. Considering both the news and technical indicators, the likelihood of downward pressure in the coming days is high.

The news could suppress risk appetite by emphasizing expectations of a Fed rate hike. Although the SPX's RSI at 35.86 is near oversold territory, the price remaining below the SMA20 (7524.67) and the MACD trading below its signal line indicate short-term weakness. The 0.04% decline over the past 24 hours confirms negative momentum. However, the SMA50 (7428.99) level may act as nearby support, potentially limiting further downside. Overall, rate hike expectations and weak technical indicators are creating downward pressure in the near term.

Expectations that the Fed will raise interest rates in September could weigh on the technology-heavy NDX index. The NDX is trading below its 20-day moving average (30,212), with the RSI at 40 indicating weak momentum. The MACD remains below the signal line, supporting a short-term bearish trend. However, the index is holding above its 50-day moving average (29,563), suggesting that any decline may be limited. Since rate hike expectations could negatively impact growth stocks, a downward move in the NDX is highly probable.

The DXY is in overbought territory with an RSI of 78, increasing the likelihood of a short-term correction. Although the news headline reflects expectations of a Fed rate hike, this expectation may already be largely priced in. The 0.84% gain over the past 24 hours suggests momentum is nearing its peak. While the MACD line remains above the signal line, overbought conditions and a high RSI point to the risk of a short-term pullback. Therefore, the DXY is expected to show a slight decline over the next 1-3 days.