“The Value of the Dollar is great.”
The Kobeissi Letter commented on President Trump’s reaction to the weaker US Dollar, stating:
“It’s a clear signal that President Trump is willing to tolerate a weaker Dollar to push rates lower and boost US exports.”
Earnings and Fed Chair Powell Take Center Stage
US futures saw a mixed Asian session on January 28. The Dow Jones E-mini was flat, while the Nasdaq 100 E-mini and the S&P 500 E-mini advanced 144 points and 18 points, respectively. Market bets on the Mag-7 topping earnings estimates boosted demand for tech stocks listed on the Nasdaq and S&P 500.
Later on Wednesday, the Fed interest rate decision and Fed Chair Powell’s press conference are the main events on the economic calendar. Hints at an H1 2026 rate cut would likely fuel demand for risk assets. A more dovish Fed rate path would support the bullish short- to medium-term outlook for US equity futures.
According to the CME FedWatch Tool, the probability of a June Fed rate cut has plunged from 83.4% on December 26 to 65% on January 27. Strong US labor market data and sticky inflation have curbed bets on a June cut. However, Powell could change the narrative if he sees inflation cooling in the near term. Uncertainty about Powell’s policy outlook may induce some market volatility in the lead-up to the press conference.
Meanwhile, the Magnificent Seven will also be under the spotlight as investors assess the outlook for AI-linked stocks. Meta (META), Microsoft (MSFT), and Tesla (TSLA) are on the earnings calendar. Strong earnings and positive outlooks would likely overshadow Fed Chair Powell’s press conference, sending the Nasdaq 100 and S&P 500 to new highs.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
The steady morning session left the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini trading above their 50-day and 200-day EMAs. The EMAs indicated a bullish bias, aligning with favorable fundamentals.
Near-term trends will hinge on tariff headlines, earnings, Fed Chair Powell, and US economic indicators. Key levels to monitor include:
Dow Jones
- Resistance: the January 13 record high of 49,901, and then 50,000.
- Support: 49,000 followed by the 50-day EMA (48,555).