Calm Markets Prevail Ahead of Federal Reserve Meeting Tomorrow

Market News Summary

Next week, US President Joe Biden has invited the four most prominent leaders in Congress to the White House for a meeting, following a warning from the Treasury Department that the available cash may not suffice to cover the government’s obligations by June.

Sources have revealed to Reuters that Morgan Stanley is planning to cut 3,000 jobs in the second quarter, marking its second round of job cuts in just six months.

Morgan Stanley has cautioned investors against overly relying on the belief that the Federal Reserve will initiate interest rate cuts later in the year, and has warned that this notion could prompt a sell-off in the market.

The bank has also suggested that the Fed’s hawkish comments may lead to a re-pricing of current interest rate expectations, shifting them from an expectation of a cut by year-end to a long-term fixation.

Dollar index (USDX)

After remaining steady, the dollar index rebounded and rose by 0.3% to reach 101.7 points following the release of the Institute for Supply Management’s (ISM) manufacturing PMI data yesterday.

Pivot Point: 101.70

Support Level	Resistance Level
101.50	102.05
101.15	102.30
100.55	102.85

Spot Gold (XAUUSD)

On Tuesday, May 2, gold prices remained stable as market participants treaded cautiously, waiting for monetary policy signals from major central banks, especially the US Fed.

Spot gold remained largely unchanged, holding steady at $1,983.29 per ounce, while US gold futures slipped 0.1% to $1,991.

Pivot Point: 1988

Support Level	Resistance Level
1977	1999
1967	2005
1959	2018

Dow Jones Index (DJ30ft – US30)

Investors were cautious in the first sessions of May as they awaited the Fed’s upcoming decision, in addition to keeping an eye on the developments surrounding the First Republic Bank crisis.

US indices closed with little change, with the S&P 500 index dipping by 0.05% to close at 4,167.3 points, and the Nasdaq index losing 14.83 points, or 0.12%, to close at 12,211 points.

The Dow Jones index also fell by 50 points or 0.15% to close at 34,047 points, slightly below its two-month high.

Pivot Point: 34190

Support Level	Resistance Level
34020	34280
33935	34445
33680	34700

US Crude (USOUSD)

Oil prices dropped on Monday’s trading session by over one dollar amidst market anticipation for the Fed’s meeting later in the week, as well as weak economic data out of China.

By the end of the session, Brent crude futures fell by 1.3%, settling at $78.45 per barrel, while US crude futures recorded a 1.5% drop, closing at $75.66 per barrel.

Pivot Point: 75.60

Support Level	Resistance Level
74.60	76.75
73.45	77.78
71.30	79.95