Daily Analysis US Indices - 8 June 2023

Futures tied to the S&P 500 experienced a slight decrease of 0.06%, while Nasdaq 100 futures saw a decline of 0.1%. The S&P 500 and Nasdaq Composite recently had a negative session, with the broad-market index closing 0.38% lower and the Nasdaq dropping 1.29%. The decline was driven by a rise in U.S. bond yields following an unexpected interest rate hike by the Bank of Canada (BoC), particularly affecting large-cap stocks.

In premarket trading, Microsoft Corp slipped slightly, whereas Apple Inc and Amazon.com Inc made modest recoveries from their declines on Wednesday.

Investors appear to be in a state of uncertainty as they await the Federal Reserve's upcoming policy meeting scheduled for June 13 and 14. Economic indicators suggest a slight decrease in inflation, although it remains higher than the central bank's target of 2%. Wage growth, for example, is slowing down, as evidenced by a 0.4 percentage point drop in wages rising 5.3% annually in May compared to April, according to data from Indeed. Market expectations indicate approximately a 66% likelihood that the Fed will maintain the current interest rates during the next meeting, according to the CME FedWatch Tool.

The price action in the Nasdaq index confirmed a correction yesterday, validating the signals from the candlestick patterns and the upper parallel of the channel. This correction has the potential to retrace toward the 13,800 level. The subsequent resistance level is anticipated around 15,240, which aligns with the 78.6% Fibonacci retracement level.