UBS Forecasts Two Fed Rate Hikes in 2026 After Strong Jobs Data

Strong employment data and UBS's projection of two Fed rate hikes by 2026 provide a positive short-term outlook for the U.S. dollar index (DXY). Technical indicators also support this view; the RSI at 53.7 indicates slight buying pressure in neutral territory, while the MACD line is above the signal line, showing positive momentum. The price is trading above the SMA20 and SMA50, suggesting an upward short-term trend. However, the move may be limited, as rate hike expectations may already be largely priced in, and the market will look for new catalysts. Therefore, the probability of continued upward movement is medium-high.

The news anticipates that the Fed may raise interest rates, which could create a generally negative environment for equity markets. GOOGL's technical indicators already show a weak outlook, with the price trading below both the 20-day and 50-day moving averages. The MACD line is below the signal line and in negative territory, indicating downward short-term momentum. The RSI at 46 is in neutral territory but suggests a slight edge for sellers. Therefore, the combination of rate hike expectations and current technical weakness increases the likelihood of a limited decline in the stock over the next 1-3 days.

UBS's projection of two Federal Reserve rate hikes in 2026 reflects a hawkish market stance following strong employment data. This could dampen risk appetite in the short term and exert downward pressure on indices. Technical indicators show RSI in neutral territory and MACD below its signal line, suggesting weakening momentum. However, the price remaining above the SMA20 and SMA50 indicates that any decline may be limited. Therefore, a slight pullback can be expected in the near term.

Strong employment data and UBS's forecast of a Federal Reserve rate hike signal a hawkish stance in the market. This could particularly weigh on technology stocks with high valuations. Although the NDX index has risen 1.7% in the last 24 hours, its RSI at 61.6 is approaching overbought territory, increasing the risk of a short-term correction. The MACD is positive but close to the signal line, suggesting momentum may weaken. Therefore, the index is likely to turn from flat to slightly negative in the short term due to the news impact.