The Dow Jones ended 60 points lower on Monday, while the S&P 500 and the Nasdaq ended 0.1% and 0.2% higher respectively. This, despite the Philadelphia Semiconductor Index snapping a record 18-day winning run. With this, the S&P 500 is now on course for its best monthly advance since 2020.
According to data, the S&P 500’s Relative Strength Index (RSI) on a 14-day timeframe, has reversed from “oversold” to “overbought” in a span of just 12 trading sessions. A RSI reading below 30 indicates “oversold”, while that above 70 is “overbought.”
Investors continue to assess developments between the US and Iran, which have not made any significant progress since the weekend talks were called off. According to reports, the White House has assessed Iran’s latest proposal but no outcome has emerged from the same just yet.
As per Iran’s state run media, the Islamic Republic plans to convey to Pakistan that the conflict could end if the US ends the Naval blockade in the Strait of Hormuz, agrees to a new legal framework regarding the future of the Strait and issues guarantees on no further attacks against the country.
What also keeps Wall Street on the edge are two other important decisions. First, the Fed rate decision on Wednesday night, which could possibly be Jerome Powell’s last as Fed Chair, along with a $16 trillion earnings test from big tech companies that have propelled the market higher for a better part of the last three years. Alphabet, Microsoft, Amazon, Meta will report after the bell on Wednesday, while Apple reports on Thursday post-market.
Oil prices continue to remain elevated with the Strait of Hormuz being close to shut. Brent closed above $108 a barrel, while the US Crude variant is also nearing the mark of $97. Goldman Sachs now expects prices to average $90 a barrel in the fourth quarter of this calendar year, up from the earlier projection of $80. It also expects Gulf exports to normalize only by end-June from the earlier projection of mid-may.
