Fed Minutes: AI Demand Could Keep Inflation Elevated

The Federal Reserve minutes indicate that demand for artificial intelligence could keep inflation high, potentially weakening expectations for interest rate cuts. Technically, the SPX is trading below the 20-day SMA (7503) with the RSI at 48, in neutral territory. The MACD remains below the signal line, suggesting weak short-term momentum. However, the price has managed to hold above the 50-day SMA (7478), which may limit downside pressure. Therefore, the market is expected to struggle for direction and trade within a narrow range.

The Federal Reserve's meeting minutes indicated that demand for artificial intelligence could keep inflation elevated, potentially weakening expectations for interest rate cuts and putting pressure on the tech-heavy NDX. Technically, the NDX is trading below its 20- and 50-day moving averages, with the RSI at 45 in weak territory. The MACD line is below the signal line and in negative territory, supporting a short-term bearish trend. However, the decline is likely to be limited, as the market may have partially priced in such news.

The DXY is trading below its 20- and 50-day moving averages, with the RSI at 42 indicating weak momentum. The MACD remains below the signal line, suggesting continued short-term bearish momentum. Although the Fed minutes noted that AI demand could keep inflation elevated, this may delay rate cut expectations and weigh on the DXY in the near term. However, inflation concerns could support the dollar in the long run, limiting the downside.