As Inflation Fails to Cool, Expectations for Fed Rate Hike Strengthen

The fact that inflation is not cooling and expectations of a Fed rate hike are strengthening is a negative factor for growth stocks in the short term. GOOGL's 24-hour change is flat and the price is trading just above the SMA20 but below the SMA50, indicating a weak technical outlook. The RSI is at 58, in neutral territory, and does not give an oversold signal, while the MACD is positive above the signal line. Rate hike expectations could create valuation pressure on technology stocks, so the 1-3 day direction is downward biased. Nevertheless, since current technical indicators have not produced a strong sell signal, confidence is moderate.

Inflation not cooling at the expected pace and strengthening expectations of a Fed rate hike could create downward pressure on risk assets in the short term. SPX closed slightly lower in the last session and is below its 50-day moving average (7672), but remains above its 20-day average (7633); this indecisive picture may limit the impact of the news. RSI at 53.9 is in neutral territory and MACD is above the signal line in negative territory, meaning momentum is weak but not oversold. Rate hike expectations could push bond yields higher and pressure valuation multiples; however, the news may already be priced in and the reaction could be limited. If the 7633 support breaks, the decline could accelerate, while a close above 7672 would ease the pressure.

Inflation not cooling at the expected pace strengthens the Fed's rate hike expectations; this creates short-term upward pressure on the DXY. Technical indicators also support this view: price is above SMA20 and SMA50, RSI at 59 is in neutral-positive territory, and MACD is positive. However, MACD is slightly below the signal line, indicating weakening momentum. Therefore, the 1-3 day impact may be limited positive; the 99.50 resistance is critical. Volatility may increase depending on the news flow.

Inflation not cooling at the expected pace strengthens the Fed's rate hike expectations; this is a negative signal for stock indices. NDX closed at 29401 in the last 24 hours, down 0.64%, and RSI at 52.7 is in neutral territory. MACD is negative and below the signal line, but since MACD is higher than the signal, there is potential for a short-term recovery. The price is just above SMA20 and SMA50, which may act as support. Due to the news, downward pressure is expected within 1-3 days, but since oversold conditions have not occurred, the decline may be limited.