Goldman Sachs Adds Another Hike to Fed Rate Forecast After Hot Inflation Data

Goldman Sachs' upward revision of its Fed rate forecast following hotter-than-expected inflation is a mildly negative risk factor for technology stocks in the near term. Although GOOGL has risen 1.47% over the past 24 hours, its RSI of 49 places it in neutral territory and below the MACD signal line, indicating weak momentum. The price is wedged just below the SMA20 (288.13) and above the SMA50 (285.71); an upward shift in rate expectations could create selling pressure at this resistance zone. However, the impact may be limited because the news concerns the macro rate path rather than the company directly, and the market may have partially priced it in. I foresee a slightly downward but low-confidence picture over the 1-3 day outlook.

The S&P 500 rose 1.96% over the past 24 hours to reach the 7,522 level, though this rally may be pressured in the short term by hot inflation data and Goldman Sachs raising its Fed rate forecast. The RSI stands at 51.8 in neutral territory, while the MACD is in negative territory but above its signal line, indicating weak momentum. The price is trading above the SMA20 but below the SMA50; expectations of a rate hike could reduce risk appetite. Nevertheless, the strong daily gain and neutral RSI increase the likelihood of a limited pullback rather than a sharp decline. Therefore, for the 1-3 day outlook, I expect a slightly downward but low-confidence impact.

Hot inflation and upward revisions to Fed rate expectations are creating a supportive backdrop for the DXY; the dollar index has already risen 0.7% over the past 24 hours and is trading above its SMA20/SMA50. However, RSI14 at 73.9 places it in overbought territory, and MACD is compressed in positive territory, suggesting that further upside may be limited in the near term. Although the news flow is lifting rate expectations and supporting the dollar, the market may have largely priced this in. The 1-3 day outlook points to a mild upward bias, but profit-taking risk exists due to overbought conditions. Confidence should be kept at a moderate level.