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S&P 500 (SPY) Remains Mixed In Choppy Trading

Cory Russell

Sep 20, 2022 14:37


Healthcare Stocks Drop Following Biden's Remarks It's a Pandemic

The S&P 500 is trying to close below 3850 as Treasury rates continue to rise in advance of the Fed Interest Rate Decision. The yield on 2-year Treasuries is attempting to settle above the 3.95% mark as traders brace themselves for an aggressive Fed.

It should be emphasized that the retreat today is not significant. The worst-performing equities today are in the healthcare sector after U.S. President Joe Biden declared the epidemic to be finished. In today's trade, Moderna's shares fell by roughly 10% while Pfizer lost 2%.

Large-cap tech stocks perform inconsistently. While Microsoft is reaching new lows, Apple is recovering from the most recent setback.

Along with the oil markets, energy equities recovered from their session lows. Leading oil companies Exxon Mobil and Chevron, however, have not been able to return to the positive zone.

Trading will probably continue to be tense before the Fed announcement. The big issue is whether Fed Chair Jerome Powell gives a hawkish signal since markets have already factored in a 75 basis point rate increase.

Traders are now concerned that abrupt rate increases could cause the economy to enter a true recession, which will result in job losses and lower corporate earnings. Given this, the market will react quite strongly to Powell's remarks.

Support Remains Solid at 3850

S&P 500 dropped below 3885 and is now testing support at 3850. Since the RSI is still in the positive range, there is still plenty of space for more downward momentum to develop should the proper triggers materialize.

The S&P 500 will go toward the next support level at 3825 if it manages to settle below 3850. The next support at 3800 will be tested if this level is successfully tested.

The S&P 500's closest upward resistance level is found at 3885. The S&P 500 will go toward the next barrier at 3900 if it rises again above this level. The S&P 500 will be pushed toward the barrier of 3920 if it moves over 3900.