Notably, a more dovish Fed rate path may enable Beijing to deliver more robust policy support to bolster the economy. However, US-China trade talks could be crucial for risk sentiment.
US-China Trade Talks Underway: Is a Deal in Sight?
US-China trade tensions escalated as trade talks got underway on Sunday, September 14. The US reportedly added more than 20 Chinese counterparties to its export control list, targeting transshipments of controlled items. Meanwhile, Beijing started investigations into anti-dumping, targeting the US semiconductor sector.
According to CN Wire,
“The Ministry of Commerce of China has initiated an anti-discrimination case investigation regarding relevant measures taken by the United States against China in the integrated circuit field. The Ministry of Commerce of China has also initiated an anti-dumping case investigation regarding relevant imported analog chips originally from the United States.”
A breakdown in trade talks could derail September’s rally, while progress could extend it.
US Manufacturing and the Fed Rate Path
The NY Empire State Manufacturing Index release could sway risk appetite. Economists expect the Index to fall from 11.9 in August to 3 in September. A sharper drop into negative territory could fuel recession fears, while upbeat data may bolster demand for US stock futures.
Because the Fed remains focused on the labor market, manufacturing data is unlikely to shift policy unless significantly weaker than expected.
Aggressive easing would lower borrowing costs, boosting earnings and share prices. Rate-sensitive sectors such as tech will be most sensitive to a shifting Fed policy stance.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
The morning gains affirmed the short-term bullish bias. However, momentum depends on the FOMC’s decision, projections, and press conference. Trade developments will also influence market trends. For traders, here are the key levels that could determine market direction in the coming sessions.
Dow Jones
- Resistance: 46,000, September 11 record high of 46,176, and then 46,500.
- Support: 45,500 and then the 50-day EMA (44,867).