U.S stock futures cautious ahead of the Fed rate-hike

This month, the market might already be priced in a 75 bps rate-hike. However, if the Fed surprises the market with a 50 bps rate hike then the market will rally. On the other hand, if the Fed decides to become more aggressive then it will spread fear in the market. At the current time, the market seems already priced in a 75 bps rate-hike and prepare for a 50 bps rate-hike next month and another 25 bps in Q1 2023.

As mentioned above, if the Fed decides to slow down on the rate hike then it could spark bullish reactions in the market.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index maintains the positions above the daily SMA 200 before the Fed FOMC meeting. The index’s next direction will depend on the reactions after the Fed interest-rate decision. If the pair fall with strong bearish momentum then the bearish trend is set to continue. If the pair continues moving upward then it needs to print a new higher high to confirm the bullish reversal.

Caterpillar Inc (CAT)

CAT share prices launched upward above the daily SMA 200 and reached the bearish trendline. The share prices currently trading near the trendline and will wait for reactions. If the share prices get rejected and trade lower then traders could wait near the daily SMA 200 for a chance to enter long positions.