Week Ahead: US500 bulls set to charge 7,000 milestone?

• FXTM’s US500 ↑ 1% YTD
• Trading less than 1% away from 7,000 milestone
• Fed decision + big tech earnings = market action?
• “Mag 7” titans = almost 34% of US500 weight
• Technical levels: 6800, 6950 and 7000

The final trading week of January could end with a bang thanks to a volley of high-impact events.

Top-level data, central bank decisions and big tech earnings will dominate the week ahead:

Monday, 26th January

• EUR: Germany Ifo Business Climate (Jan)
• USD: US Durable Goods Orders (Nov)

Tuesday, 27th January

• AUD: Australia NAB Business Confidence (Dec)
• USD: US Conference Board consumer confidence
• WTI: US API Crude Oil Stocks Change (w/e Jan 23)

Wednesday, 28th January

• AUD: Australia Inflation Rate (Dec)
• EUR: Germany GfK Consumer Confidence (Feb)
• CAD: BoC Interest Rate Decision
• USD: Fed Interest Rate Decision
• US500: Meta, Microsoft, Tesla earnings

Thursday, 29th January

• NZD: New Zealand ANZ Business Confidence (Jan)
• JPY: Japan Consumer Confidence (Jan)
• CHF: SNB rate decision
• EUR: Eurozone Economic Sentiment (Jan)
• US500: Apple earnings

Friday, 30th January

• JPY: Tokyo CPI, jobless rate, industrial production, retail sales
• EUR: Germany GDP (Q4); Germany Inflation Rate (Jan); Eurozone GDP (Q4)
• TWN: Taiwan GDP
• CAD: Canada GDP (Nov, Dec)
• US30: US PPI (Dec), Chevron earnings

Our focus falls on FXTM’s US500, which has gained just over 1% year-to-date.

Equities appear to be on the rebound after easing geopolitical risk surrounding Greenland lifted global sentiment.

Note: Trump has announced a “framework for a future deal” with NATO that will provide the US total and permanent access to Greenland.

With investors redirecting their attention back toward macro forces and tech, further upside could be on the cards ahead of big tech earnings and Fed rate decision.

Examining the charts, FXTM’s US500 remains in a bullish channel with the next key checkpoint at 7,000.

With all the above said, here are 3 factors that could trigger significant price swings: 

1) Fed rate decision – Wednesday 28th Jan

The Fed is expected to leave interest rates unchanged in January but any clues on future policy moves may rock the US500.

President Donald Trump is expected to announce his new pick to lead the Federal Reserve by the end of the month. Speculation around who this could be may translate to additional levels of volatility.

According to Polymarket, it may be Kevin Warsh or Rick Rieder.

Traders are currently pricing a 30% chance that the Fed cuts rates by April with this jumping to 75% by June.

• FXTM’s US500 may jump if the Fed signals that lower rates are down the road.
• A cautious sounding Fed could cap upside gains on the index.

Note: The US500 is forecast to move 1% higher or 0.3% lower in a six-hour period post-release.

2) Big tech earnings

Four of the so-called “Magnificent” 7 tech giants with a combined market cap of over $10 trillion are set to publish their results in the week ahead.

Quarterly results from Meta, Microsoft, Tesla and Apple could provide fresh insight into how the industry fared last quarter amid concerns over an AI bubble.

Considering that the combined weight of Meta, Microsoft, Tesla and Apple makes up roughly 16% of the US500, the incoming earnings could mean business.

• A solid set of results and optimistic forward guidance from tech titans may propel the US500 higher.
• Should results disappoint and concerns be expressed about the earnings outlook, the US500 could fall.

3) Technical force

The US500 has staged a rebound on the daily charts with bulls back in the game. Prices are trading above the 50, 100, and 200-day SMA while the RSI signals further upside momentum.

• A solid weekly close above the 6950 level may open the doors toward the 7000 milestone and beyond.
• If prices slip below the 50-day SMA, this could trigger a decline toward 6800 and the 100-day SMA at 6770.