Market Insights: Wednesday, January 28th, 2026

Market Overview
US stocks were little changed on Wednesday as the Federal Reserve delivered its first policy decision of the year and investors positioned ahead of a flurry of earnings from megacap technology companies. The S&P 500 slipped modestly from record territory after briefly vaulting above the 7,000 level for the first time intraday, while the Nasdaq Composite edged higher by roughly 0.2%, supported by relative resilience in technology. The Dow Jones Industrial Average finished near flat, reflecting a market largely in wait-and-see mode rather than pressing aggressively in either direction. The Federal Reserve left interest rates unchanged in a 3.5% to 3.75% range, as expected, in a 10–2 decision, with Governors Chris Waller and Stephen Miran dissenting in favor of a 25 basis point cut. While the decision itself was widely anticipated, attention centered on Chair Jerome Powell’s press conference for clues about the timing of future easing. Ahead of the meeting, markets were pricing in roughly two quarter-point rate cuts by the end of 2026, according to CME FedWatch, and Powell’s comments did little to meaningfully alter those expectations. Political pressure on the Fed remained an undercurrent after reports of a criminal investigation tied to Powell’s Senate testimony resurfaced, alongside ongoing speculation that President Trump could announce Powell’s successor at any time. Currency markets also stayed in focus following a sharp recent slide in the US dollar, which rebounded modestly on Wednesday after touching its weakest level since 2022 earlier in the week. In equities, technology remained in the spotlight as optimism around the AI cycle was reinforced by a surprise surge in orders for ASML’s chipmaking equipment, fueling confidence in sustained demand for advanced semiconductors. While ASML shares turned lower on the day, the developments buoyed sentiment around Nvidia and TSMC, both of which rely on ASML’s tools. Attention now turns squarely to earnings from Microsoft, Meta Platforms, and Tesla after the close, followed by Apple on Thursday, placing AI spending plans, cloud demand, and forward guidance at the center of the market’s next directional move. Meanwhile, gold surged through $5,400 to another record high, underscoring persistent demand for hedges even as equities hover near all-time highs.

SPY Performance
SPY spent the session consolidating near record levels after an overnight push to new highs. The ETF opened at $697.07, traded to an intraday high of $697.84, and pulled back to a low of $693.94 before settling near the middle of the range to close at $695.56, essentially flat on the day with a 0.01% gain. Trading volume totaled 56.15 million shares, below average and notably light for an FOMC session, reinforcing the view that traders were reluctant to commit heavily ahead of earnings and additional catalysts. Price action was front-loaded, with early weakness followed by sideways chop through and after the Fed decision, leaving SPY comfortably above the $685 level that defines bull control.

Major Indices Performance
Index performance reflected indecision rather than broad risk aversion. The Nasdaq finished up 0.17%, supported by selective strength in technology, while the Dow gained 0.02% and the S&P 500 finished just off flat after slipping from its intraday record. The Russell 2000 declined 0.53%, continuing to lag and highlighting that leadership remains concentrated in large-cap growth rather than broad-based participation.

Notable Stock Movements
It was a mostly red session across the Magnificent Seven, led lower by Apple, which fell 0.71%. The notable exceptions were Microsoft, Alphabet, and Nvidia, with Nvidia up as much as 1.60% following continued optimism tied to AI infrastructure demand. The mixed performance underscored rotation within megacap leadership rather than a coordinated move away from risk. Sustained weakness across both megacap technology and crypto would be required to signal a larger pullback.

Commodity and Cryptocurrency Updates
Commodities sent a strong signal beneath the surface. Crude oil rose 1.54% to $63.35, extending its move above the $60 level our model has been forecasting for several months. While volatility remains possible, sustained trade above $56 keeps the door open for a broader rally toward $70. Gold surged 5.86% to $5,420, marking another historic high as investors continued to hedge geopolitical, fiscal, and monetary risk. Bitcoin slipped 0.14% but held above $88,900, reflecting consolidation rather than a structural breakdown after recent volatility.

Treasury Yield Information
The 10-year Treasury yield rose 0.50% to close near 4.244%. In our framework, yields above 4.5% begin to create meaningful headwinds for equities, while sustained trade above 4.8% often coincides with sharper market selloffs. A move above 5% historically signals significant equity risk, with a 20% or greater correction becoming likely near 5.2%. Wednesday’s uptick added modest pressure but did not disrupt equity stability.

Previous Day’s Forecast Analysis
Tuesday’s framework emphasized that while SPY was pressing to new highs, upside momentum was likely to stall ahead of FOMC and major earnings, with consolidation expected above $685.

Market Performance vs. Forecast
Wednesday’s session followed that roadmap closely. SPY briefly extended higher overnight, failed to sustain momentum above $697, and spent the bulk of the session chopping sideways without threatening key support.

Premarket Analysis Summary
In Wednesday’s premarket notes published at 7:53 AM, SPY was trading near $697.54 with upside targets at $698.25 and $700.50, and downside levels at $696, $693.15, $692.50, and $691.15. The plan anticipated bullish continuation above the $696 bias, with consolidation expected if that level failed.

Validation of the Analysis
The intraday tape validated that framework. SPY briefly pushed higher early, failed to hold above the upper targets, and rotated lower into the $694 area before stabilizing. No downside targets below $692.50 were meaningfully tested, confirming consolidation rather than a trend change.

Looking Ahead
Thursday brings Unemployment Claims, followed by PPI on Friday. Earnings from several large companies remain the primary catalyst, while geopolitical headlines and government funding negotiations remain a wildcard.

Market Sentiment and Key Levels
Sentiment remains bullish but measured. SPY is well above $685, keeping bulls firmly in control, though near-term momentum has slowed. Resistance sits at $698, $699, $701, and $704, while support rests at $694, $692, $690, and $688. The $698–$705 zone remains heavily defended, favoring failed-breakout setups.

Expected Price Action
SPY’s projected maximum range for Thursday is $688 to $703, with the Call side dominating in a wide band that signals trending action with periods of intermittent chop. With limited data and heavy earnings, overnight moves may drive much of the action.

Trading Strategy
As long as SPY holds above $690, longs remain favored on pullbacks toward $694–$692. Shorts are preferred on failed breakouts between $698 and $705. Avoid chasing strength and remain responsive to earnings-driven moves.

Model’s Projected Range
SPY’s projected maximum range for Thursday is $688 to $703, with the Call side dominating in a wide band that signals trending price action with periods of intermittent chop. Thursday only has Unemployment Claims, which is unlikely to move markets given the Fed’s view that the labor market is stabilizing and in good shape. FOMC produced little reaction today, even with a dovish Chair Powell, likely because SPY is already trading at all-time highs and lacking near-term energy to push much further. After three strong years, odds still favor a constructive fourth year with potential gains of up to 15%, suggesting higher prices in 2026 absent a major external shock. Earnings from several large companies are due this week and geopolitical headlines remain a wildcard, so traders should continue to trade what they see as new information hits the tape. Overnight SPY gapped higher and extended its push to new highs, trading above $697 at the open and briefly exceeding $698.35 before retracing. Most of the morning was spent pulling back to $694, followed by sideways action into and after FOMC, with SPY settling into a tight $694–$696 range and closing essentially flat at $695.42. Price remains well above $685, the level that defines bull control, and as long as that holds, the path to $700 remains intact. Volume was below average, which is unusual for an FOMC day and suggests the market is waiting for an external catalyst, possibly earnings or clarity around a potential government shutdown. Overnight, bulls want to hold above $692 at a minimum to maintain upside momentum. Bears are unlikely to engage unless $685 fails, and even then, $680 must break to generate meaningful downside pressure. If $692 holds, bulls are likely to attempt another push toward $700, though a decisive catalyst may be required to clear that level. The long-term trend remains intact above $640, and with February known for surprise selloffs, any deeper pullback should be viewed as a potential buy-the-dip opportunity for a spring or summer rally. Absent a catalyst, resistance for Thursday sits at $698, $699, $701, and $704, while support rests at $694, $692, $690, and $688. The $698–$705 zone is heavily defended, favoring failed-breakout shorts, while longs remain favored above $690. Crypto was flat today, while most MAG stocks declined with the exception of Tesla, Alphabet, and Nvidia. Sustained weakness across both leadership groups would be required for a larger pullback. VIX rose slightly to 16.38 and remains in risk-on territory. SPY closed inside a redrawn bull trend channel from the April lows, with structural support near $681.

Market State Indicator (MSI) Forecast

Current Market State Overview:
The MSI ended the session in narrow, Bearish Trending Market State with SPY well below MSI supported turned resistance. There were no extended targets for the entire day except one lone 2 minute period during FOMC. Overnight the MSI rescaled higher as SPY gapped up to a new intraday all-time high. By the open, the MSI was in a wide bullish state and by noon, the MSI rescaled to a narrow bearish state which is where it closed the day. For tomorrow the MSI is forecasting some potential weakness but with a slew of earnings due to be released, the current state is not predictive. Instead check the MSI in the morning to identify the proper set up as its likely to change materially. MSI resistance is $694.52 and higher at $695.46.
Key Levels and Market Movements:
Tuesday we stated, “Wednesday has FOMC, and it is impossible to forecast direction on a day like this,” and added, “Expect a potential move up $10 to $20, down $10 to $20, or no move at all,” while also noting, “The bias for Wednesday favors selling failed breakouts above $697 and buying dips down to $685, with heavy chop expected late in the morning before the announcement.” With the MSI opening in a wide Bullish Trending Market State and no extended targets at the all-time highs, the correct plan was to follow that framework and look for a failed breakout to the downside. That failed breakout occurred in the premarket, so at the open the only viable short was selling the triple top near $697.50, with MSI support at $695.45 as the first target. That target was reached easily before noon, and with FOMC approaching, closing the trade before 2 pm was the only prudent decision. After the announcement, the MSI rescaled into a ranging state, which we do not favor trading, leaving little opportunity for additional setups. If you took one trade and were finished for the day, that was a solid outcome. One trade a day is all that is required to earn a living. Once again, patience, discipline, and trading level to level using the premarket, post-market roadmap, and MSI signals aligned perfectly with our broader framework for structure, trend, and execution. The MSI once again proved its reliability as the cornerstone of our trading process.
Trading Strategy Based on MSI:
Wednesday has FOMC, and it is impossible to forecast direction on a day like this. Expect a potential move up $10 to $20, down $10 to $20, or no move at all. There is no way to know in advance. Inexperienced traders are often better off sitting out, as FOMC days are typically violent, trap-filled, and unforgiving. That said, the primary trend remains bullish as long as SPY holds above $685. Bulls have complete control above this level. A sustained hold above $695 opens the door for a push toward $700 and higher. The bias for Wednesday favors selling failed breakouts above $697 and buying dips down to $685. Expect heavy chop late in the morning, which makes fading extremes reasonable until the announcement. After FOMC, trade only what you see and follow the MSI closely. For bears to regain any real traction, SPY must break below $680 and stay there. The long-term bull trend remains intact above $640. Failed breakouts and failed breakdowns continue to offer the highest-probability setups, so remain flexible, avoid trading during Ranging Market States, and ensure all trades are fully aligned with MSI signals. Providing real-time insights into market control, momentum shifts, and actionable levels, the MSI when integrated with our Pre-Market and Post-Market Reports continues to sharpen execution precision and elevate trade quality. If you haven’t yet integrated MSI and our model levels into your process, now is the time. Contact your representative to get started as these tools are designed to support consistency and enhance performance.

Dealer Positioning Analysis

Dealers are selling SPY $698 to $715 and higher strike Calls while buying $696 to $697 Calls indicating the Dealers’ desire to participate in any continuation of the rally on Thursday. The ceiling for tomorrow appears to be $701. To the downside, Dealers are buying $695 to $635 and lower strike Puts in a 2:1 ratio to the Calls they’re selling/buying displaying little concern that prices could move lower. Dealer positioning is unchanged from neutral/slightly bullish to neutral/slightly bullish.
Looking Ahead to Friday:
Dealers are selling SPY $698 to $720 and higher strike Calls while buying $696 and $697 Calls indicating the Dealers’ desire to participate any rally into Friday. The ceiling for the week appears to be $705. To the downside, Dealers are buying $695 to $585 and lower strike Puts in a 4:1 ratio to the Calls they’re selling, reflecting a market that is a slightly concerned about lower prices but not overly so. For the week Dealer positioning is unchanged from slightly bearish to slightly bearish. We advise reviewing Dealer positioning daily for directional clues. These positions evolve quickly and tracking them is essential for staying ahead of shifting market sentiment.

Recommendation for Traders
Into Thursday, respect the bullish structure while remaining selective. Favor buying pullbacks that hold above $690 and selling failed breakouts near $698–$705. Manage risk tightly, stay flexible, and trade what price confirms rather than anticipating the next catalyst.

Good luck and good trading!