NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Pull Back From Session Highs As Fed Raises Inflation Projections

SP500

SP500 settled near the 6000 level as traders reacted to Fed decision. Fed left the interest rate unchanged, in line with analyst expectations. Fed has also released its updated economic projections, which may have a material impact on market dynamics. Importantly, the federal funds rate projection for 2026 was raised from 3.4% to 3.6%, while projection for 2027 was changed from 3.1% to 3.4%. Put simply, investors should expect that Fed will not rush to cut rates in the next few years, although the central bank believes that it would be ready to push rates below the 4.00% level by the end of 2025. Today, traders also had a chance to take a look at the Initial Jobless Claims report. the report indicated that 245,000 Americans filed for unemployment benefits in a week, in line with analyst forecast. Both housing market reports missed analyst expectations. Housing Starts decreased by -9.8% month-over-month in May, compared to analyst consensus of -0.8%. Building Permits decreased by -2%, while analysts expected that they would decline by -1.5%. Traders also monitored the situation in the Middle East. President Donald Trump has recently declined to say whether U.S. will join Israel and attack Iran to destroy its nuclear program. News from the Middle East will continue to serve as an important catalyst for global markets.

Currently, SP500 is trying to settle back below the support at 6000 – 6010. In case this attempt is successful, SP500 will move towards the next support at 5910 – 5920. Traders should note that Powell’s press conference may have a significant impact on SP500 dynamics.

NASDAQ

NASDAQ is moving back and forth after the release of Fed decision. The index did not manage to settle above the 50 MA at 21,794.

If NASDAQ declines below the 21,700 level, it will head towards the nearest support, which is located in the 21,450 – 21,500 range.

Dow Jones

Dow Jones made an attempt to move higher after the release of Fed decision but lost momentum and pulled back towards the 42,300 level.

A move below the support at 42,000 – 42,100 will open the way to the test of the next support level at 41,400 – 41,500.

For a look at all of today’s economic events, check out our economic calendar.