Daily Analysis US Indices - 7 June 2023

S&P 500 futures and Nasdaq-100 futures both experienced a slight gain of 0.1%. Economic data remains scarce leading up to the Federal Reserve policy meeting next week. However, investors are awaiting the release of trade balance data before the market opens on Wednesday while exercising caution ahead of inflation data.

The U.S. stock market has been bolstered by the upward movement of mega-cap stocks and a stronger-than-anticipated earnings season. Nevertheless, some analysts believe that profit-taking could be on the horizon for major growth stocks, including big tech companies. Pre-market trading indicates that Apple Inc., Nvidia Corp., and Microsoft Corp. are all set to decline following Tuesday's downward trend, suggesting a potential downturn in the tech shares rally.

Market participants in the money market are predicting a 75% likelihood that the U.S. central bank will maintain interest rates at their current level during the June meeting, but will implement a rate hike in July, as indicated by the CME's Fedwatch tool.

In May, China experienced a substantial 7.5% year-on-year slump in exports, significantly surpassing the anticipated 0.4% decline. This decline marks the most significant drop since January, raising concerns about global demand.

Despite a successful breakout above the 14400 level, the Nasdaq price keeps failing to surpass the upper parallel of the bullish channel in the past 3 trading sessions and the candle formation suggests a possible correction. Traders should monitor the next resistance level around 15,240, which coincides with the 78.6% Fibonacci retracement level. However, if a correction occurs, there is a possibility of a retracement toward the 13,800 level.