Tonight, markets will find clues to the Fed’s agenda for this year. Ahead of the Fed’s long-awaited policy meeting and Jerome Powell’s press conference, Wall Street is not going to trade quietly. The New York session promises volatile trading today as investors are likely to revise sentiment a few times. Before the Fed’s verdict, traders will have to evaluate fresh data on the US labor market which will be released in the early New York trade. InstaForex analysts will guide you through the maze of events.

The benchmark indices closed yesterday more than 1% up. The labor cost data improved market sentiment and the stock indices recouped earlier losses.The Dow Jones added 386 points or 1.09%. The Nasdaq logged the biggest gain of 1.67%. The S&P 500 climbed by 1.46% to close at 4,076.
The major stock indices traded with minor fluctuations in the pre-market. They all retreated by 0.1 – 0.4% from yesterday’s intraday highs. Market sentiment today will depend on a variety of factors, especially the employment data and the Fed’s statements. We should be ready for unexpected news. So, the S&P 500 is likely to trade in the intraday corridor between 3,940 and 4,140.
The S&P 500 closed January with gains for the first time since 2019. The index increased by 6.2% last month. The Nasdaq surged by 10.7%, the strongest growth in January since 2001.
The stock indices gained ground in response to a report by the Labor Department. The labor unit cost rose at the slowest pace over the year in the fourth quarter because wage growth also slowed down. It could be the sign that the Fed’s efforts have affected the labor market.

As for corporate reports, Exxon Mobil shares jumped by 2.2% after the top US oil company reported a net profit of 56 billion dollars for 2022. The company beat its own record and also set a historic high for the Western oil industry.

General Motors shares spiked by 8.3% because of the higher-than-expected revenue forecast for 2023. Caterpillar shares dropped by 3.5% because the profit of the equipment manufacturer shrank by 29% in the fourth quarter. McDonald's shares fell by 1.3% when the burger chain warned inflation would weigh on margins in 2023.

All 11 sectors of the S&P 500 closed in the green. The commodity sector and consumer sector logged the biggest gains. Both sectors rose by more than 2%.

Today investors are riveted to the Federal Reserve and the labor market. They are alert to the press conference by Jerome Powell. Analysts predict that the central bank will retain its hawkish rhetoric because it is hardly interested in robust growth in financial markets.

Meanwhile, the information background before the New York session is beneficial to the stock market. Inflation in the euro area slackened to 8.5% annually last month, much lower than expected. It is the lowest reading since May last year.

Apart from the signs of disinflation, stock investors cheered employment data for the US private sector. The ADP payroll processor reported that the US private sector added 106,000 jobs in January, much lower than 253,000 jobs in December and the consensus of 178,000 jobs. It is the weakest score since January 2021.

Besides the ADP data, investors will be able to assess the JOLTs job openings for December.

Today Intel stated that it considerably cut wages of its employees and executives a week later after it had posted lower-than-expected sales forecast.

Tesla is planning to ramp up output rates at its facility in Shanghai in the next two months to meet demand boosted by aggressive price cuts for the most popular models. The company intends to manufacture almost 20,000 cars on average per week in Shanghai in February and March. Tesla shares rose by 1% following the news. The US dollar was weakening in the run-up to the Fed’s announcements. Its index was trading at about 101.7, having lost 0.37% before the Fed’s verdict. Still, trading forces might instantly move in the opposite direction, depending on Powell’s remarks. Thus, the intraday for the US dollar index is seen in a wide range between 100.8 and 102.9.


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00:00 INTRO
00:52 S&P500
02:04 USA
02:43 QUOTES
04:15 ADP EMPLOYMENT CHANGE (JANUARY)
05:20 USDX
07:05 USD | CAD
07:22 OIL
08:28 BTC | USD