S&P 500 falls back towards the region of 4,350 points

• The S&P 500 is moving lower during the European session on Thursday.
• The Fed kept its interest rate unchanged, as expected.
• The Fed projections imply two new 25 basis point rate hikes this year.
• There are several second-tier US economic data releases today, though they are unlikely to make any big moves in the S&P 500.

The index S&P 500 falls back towards the 4,350 region points during the European session on Thursday, after the decision of the United States (US) Federal Reserve (Fed) to leave rates unchanged from the previous day. At time of writing, the index is trading in the area of ​​daily lows at 4,354, losing -0.37% on the day.

Following the June monetary policy meeting held on Wednesday, the Fed kept its interest rate unchanged in the range of 5%-5.25%, as expected. The entity decided to his first break after ten consecutive raising meetings of rates.

However, the Summary of Economic Projections showed that the projection of the terminal interest rate for the end of 2023 was revised upwards, standing at 5.6% compared to 5.1% in March. The dot plot puts the rate by the end of 2024 at 4.6%, up from the 4.3% previously projected. In short, the Fed projections imply two more 25 basis point (bps) rate hikes this year and 100 bps of rate cuts in 2024.

During the press conference after the meeting, Federal Open Market Committee (FOMC) Chairman Jerome Powell confirmed that further rate hikes this year are seen as appropriate by almost all policy makers and that much remains to be done to bring inflation back to the central bank’s target of 2%. Powell added that the Fed’s projections are not a plan or a decision and that they will continue to make the decisions. meeting to meetingso a decision on July has not yet been made.

At the time of writing, the probability that rates will rise by 25 basis points after the July 25-26 FOMC meeting is close to 75%:

As for US economic data, monthly retail sales, weekly jobless claims, Empire State Manufacturing Index, Philadelphia Fed Manufacturing Index and Industrial Production will be released on Thursday.

It is expected that retail sales fall -0.1% in Mayafter the increase of 0.4% of the previous month.

On the other hand, it is expected that weekly jobless claims for the week ending June 9 drop to 249,000 from 261.00 the previous week.

Regarding manufacturing data, it is expected that the New York Empire State Index for June improves to -15.1 points from -31.8 in the previous month, while Philly Fed region index worsens to -14 points from the previous -10.4.

Finally, US industrial production is expected to rise 0.1% in Mayafter the rise of 0.5% in April.

These data alone are unlikely to drive big moves in the S&P 500.

S&P 500 daily chart

S&P 500 technical levels