US stock markets saw mixed performance, with the Dow Jones trading around the flatline and the S&P 500 and Nasdaq 100 up 0.1% on Wednesday.

• The Federal Reserve is expected to increase borrowing costs by 25bps before signaling a pause in its tightening cycle during its latest policy decision.
• Despite concerns about a potential recession in the banking sector, private payroll job growth in April surpassed expectations, according to the latest ADP data.
• Corporate earnings reports were mixed, with Ford Motor and Starbucks exceeding revenue and profit expectations while Estée Lauder’s earnings beat forecasts but fell short on revenue.
• Shares of Ford Motor gained over 1%, while Starbucks and Estée Lauder dropped 5% and 15%, respectively.
• The ISM report showed that the US services sector expanded in April.

In the daily interval of the E-mini S&P 500 Futures contract, buyers have been providing support for the lower extreme of the new Quarter’s developing value area, while sellers may look to target the Year’s VWAP if the Federal Reserve surprises the market with a higher interest rate hike. However, if the Fed decides to halt interest rate hikes, the market is expected to soar to the swing highs.

The strong job market provides the Fed with more leeway to hike interest rates, as this solid data could indicate higher demand and potential price increases. Expansionary data, such as the S&P Global US Composite PMI and the ISM Services index, point to a recovery in the business trend, giving the central bank additional reasons to hike and combat potential inflation. However, the already-elevated interest rates and tightening programs have affected the banking sector, placing the Fed in a difficult position when deciding on policy.

The intraday perspective reveals that the market is currently trading around the prior VWAP close level, in a balanced behavior as traders await the FOMC meeting. As a result, market participants are leaning on particular extremes to conclude rotational scenarios. The market has auctioned back into the value area, and buyers might be looking to purchase around the DVAL to target the session’s swing high.

Calculations for the session point to the upside, with a weakening dollar for the time being. However, the positive volatility in this market keeps buyers cautious about the direction, resulting in a rotational market.

Gold prices increased by about 0.5% due to concerns in the banking sector and fears of a potential recession resulting from elevated interest rate hikes.

Despite a negative inventory read of about 1.28 million barrels in today’s EIA release, which should have been bullish due to production cuts by OPEC+, WTI crude oil’s price fell by about 4% towards $68.80 a barrel. This drop in oil prices may be attributed to recession fears and the resulting potential lower demand for oil.

Bitcoin fell by about 0.8% against the dollar due to the expected 25 bps interest rate hike for the session.

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