The US stock market has entered a new phase following the Federal Reserve's first rate cut of the year. The decision to lower the federal funds rate by 25 basis points was widely anticipated and already priced in by market participants — but how Jerome Powell framed the move sparked active debate.
The Fed Chair described the decision as a "risk management" cut, emphasizing that the central bank has no risk-free path forward. In other words, the rate was lowered not due to panic or a sharp deterioration in economic conditions, but rather as a preemptive step to balance the risks of an economic slowdown and to preserve labor market stability.
Investors interpreted this as a signal: the Fed is entering a soft landing phase, where rates will gradually decline without aggressive easing. The Fed also indicated the possibility of two more cuts in 2025 — one of 50 basis points and another 25 bps cut in 2026.
This shifted market expectations: now, investor focus is less on inflation — which remains under control — and more on the employment outlook. This shift could benefit growth stocks, especially tech giants, for whom capital costs are a critical factor.
Corporate momentum adds fuel to fire
On the pre-market, Nvidia jumped over 3%, continuing to rally as one of the biggest beneficiaries of the AI boom. Even more striking was the Intel rally, with shares surging nearly 29% after news broke that Nvidia would invest $5 billion in a minority stake in the company.
This move has dramatically shifted market perception of Intel as a viable player in the future landscape of AI. If the industry leader is buying in, it's a sign of confidence — and possibly the start of a long-term strategic alliance. As a result, the semiconductor sector became the main source of optimism and a key driver of Nasdaq futures gains.
Technical outlook
S&P 500 For the first time in history, the index broke above 6,600 and held gains around 6,630 in pre-market trading. Technically, this confirms the strength of the uptrend — recent weeks of consolidation have resolved to the upside, turning the 6,600 level into key support.
If the index stays above this zone, the next target lies in the 6,700–6,720 area, where Fibonacci projection extremes cluster. In case of a pullback, the first line of bullish defense is at 6,540–6,550, with deeper correction risk toward 6,480.
Nasdaq 100 Trading near 24,440, the Nasdaq is also showing strength. The Fed decision helped the index recover from last week's correction and hold near the upper boundary of its rising channel. The key resistance now is the psychological level of 24,500 — a breakout could lead to 24,750–24,800.
On the downside, support is at 24,000, which has withstood several bearish tests in recent days. Holding this line would signal continuation of the uptrend and the potential to reach new record highs.
Bottom line
The technical picture confirms the underlying fundamental optimism: the Fed's rate cut, combined with strong corporate developments, has returned markets to buy mode. However, this market remains selective and demanding — investors are now looking for confirmation of the trend's sustainability through upcoming macro data and earnings reports from major companies.
For now, the momentum favors the bulls, and the indices appear ready to set new records.
The material has been provided by InstaForex Company - www.instaforex.com
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The US stock market has entered a new phase following the Federal Reserve's first rate cut of the year. The decision to lower the federal funds rate by 25 basis points was widely anticipated and already priced in by market participants — but how Jerome Powell framed the move sparked active debate.
The Fed Chair described the decision as a "risk management" cut, emphasizing that the central bank has no risk-free path forward. In other words, the rate was lowered not due to panic or a sharp deterioration in economic conditions, but rather as a preemptive step to balance the risks of an economic slowdown and to preserve labor market stability.
Investors interpreted this as a signal: the Fed is entering a soft landing phase, where rates will gradually decline without aggressive easing. The Fed also indicated the possibility of two more cuts in 2025 — one of 50 basis points and another 25 bps cut in 2026.
This shifted market expectations: now, investor focus is less on inflation — which remains under control — and more on the employment outlook. This shift could benefit growth stocks, especially tech giants, for whom capital costs are a critical factor.
Corporate momentum adds fuel to fire
On the pre-market, Nvidia jumped over 3%, continuing to rally as one of the biggest beneficiaries of the AI boom. Even more striking was the Intel rally, with shares surging nearly 29% after news broke that Nvidia would invest $5 billion in a minority stake in the company.
This move has dramatically shifted market perception of Intel as a viable player in the future landscape of AI. If the industry leader is buying in, it's a sign of confidence — and possibly the start of a long-term strategic alliance. As a result, the semiconductor sector became the main source of optimism and a key driver of Nasdaq futures gains.
Technical outlook
S&P 500 For the first time in history, the index broke above 6,600 and held gains around 6,630 in pre-market trading. Technically, this confirms the strength of the uptrend — recent weeks of consolidation have resolved to the upside, turning the 6,600 level into key support.
If the index stays above this zone, the next target lies in the 6,700–6,720 area, where Fibonacci projection extremes cluster. In case of a pullback, the first line of bullish defense is at 6,540–6,550, with deeper correction risk toward 6,480.
Nasdaq 100 Trading near 24,440, the Nasdaq is also showing strength. The Fed decision helped the index recover from last week's correction and hold near the upper boundary of its rising channel. The key resistance now is the psychological level of 24,500 — a breakout could lead to 24,750–24,800.
On the downside, support is at 24,000, which has withstood several bearish tests in recent days. Holding this line would signal continuation of the uptrend and the potential to reach new record highs.
Bottom line
The technical picture confirms the underlying fundamental optimism: the Fed's rate cut, combined with strong corporate developments, has returned markets to buy mode. However, this market remains selective and demanding — investors are now looking for confirmation of the trend's sustainability through upcoming macro data and earnings reports from major companies.
For now, the momentum favors the bulls, and the indices appear ready to set new records.
The material has been provided by InstaForex Company - www.instaforex.com