Dow's stock market breadth favor bulls – Investors eye FOMC

Global Stock Market Today

Stocks in Asia were little changed as investors adopted a cautionary tone ahead of the FOMC event. The Shanghai index declined 0.40%. The HSI stock index also moved lower by 0.21%, while the Korean Kospi fell 0.42%. The Japanese Nikkei Index rose 0.09%.

The FOMC Day 

Higher volatility is the name of the game today and day traders are likely to bank on this. The Federal Reserve will announce its monetary policy decision and the expectations are that the Fed will keep the interest rates unchanged. The element of surprise can come if the Fed increases its growth forecast and by doing only that, the dollar could soar.

Dow Index and S&P500 Index: Market Breadth

It was another up day for the stock market yesterday. The Dow Jones breadth improved largely and 70% of the Dow Jones stocks traded above their 200-day moving average yesterday. 

The S&P 500 stock breadth also had a decent improvement but not as much as the Dow. 62% of the shares traded above their 200-day moving average yesterday.

Dow Jones and S&P 500 Futures Today

The Dow Jones futures are swinging between gains and losses. At the time of writing this report, the Dow Jones futures were trading higher by 10 points. Traders are likely to pay close attention to the U.S. retail sales data, which is at 1:30 BST. The forecast is for 1.0%, which is slightly lower than the previous reading of 1.9%.

The Dow Jones futures are still trading above the 50-day simple moving average on the daily time frame, which confirms that the uptrend is strongly in place. However, the price is still trading between the lows and highs of last week and in order to have a firm confirmation of the continuation of the uptrend, the price needs to break above the 28402—the high of the last week. 

The S&P 500 futures, the wider representation of the U.S. equity market, are moving higher on the daily frame, and the price has been forming a series of higher lows and higher lows. However, just like the Dow Jones, the S&P 500’s price is also trading within the high and lows of last week. This indicates that traders are still not entirely sure about the future path of this trend and the bull trend is somewhat vulnerable. 

Stock Market Rally 

The S&P 500 stock index recorded another victory yesterday, and it advanced 0.52%. The communication sector led the index higher, and eight out of 11 sectors closed higher. 

Alexion stock contributed the biggest gain, soaring 6.31%. Carnival stock was the largest drag; it fell by 10.8%. The S&P 500 stock index is up 9.7% during this quarter.

The Dow index gained only 2 points yesterday, and the Dow stocks moved the index higher by 0.01%. 17 stocks of the Dow Jones Index increased in value, and 12 shares of the Dow index moved lower. Salesforce stock advanced higher by 3.2% and was the biggest mover for the Dow, while Caterpillar stock dropped 3.2%, the biggest drag for Dow Jones industrial average index.  

The NASDAQ composite, a tech-savvy index, rose 1.43% yesterday.