Less than two hours to the December FOMC!
Time is ticking before the FOMC meeting, and volatility has stayed remarkably contained in Stocks—a stark contrast to the Oil market, which saw its price battered again in today’s session.
Still, the Dow Jones is outperforming its peers, so traders are expecting a positive outlook for the Industrial index – Watch out for bad surprises!
What is certain is that things should start moving heavily towards the afternoon.
With today’s FOMC meeting also releasing the Summary of Economic Projections (SEP)—including the famous “Dot Plot”—expect a wave of repricing as traders scramble to explore the different scenarios for 2026, particularly given the ongoing doubts about future decisions in a complex political and economic landscape.
The current setup is optimistic: since NY Fed President Williams’ dovish comments, most indexes have rallied strongly and are approaching this event close to their All-Time Highs.
However, elevated valuations leave little room for error.
We will give out a few scenarios before providing charts and technical levels for all the major US Indexes.
Keep in mind that the scenarios may be incorrect as things tend to get really chaotic during such events.
And even after initial reactions, you can still expect levels and trends to change throughout the event.
Put on your volatility shoes and get ready to see a lot of movement.
Read More:
- Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) levels for the FOMC
- US Curve outlook: Why US Treasury yields are surging before the Fed
- FOMC Meeting Preview: How the FOMC’s December Dot Plot Will Affect the US Dollar (DXY)
Scenarios for the FOMC – To be taken with a pinch of salt
Keep in mind that the scenarios may be incorrect as things tend to get really chaotic during such events.
The Bullish Case – A dovish cut
Odds for this scenario are not too high but still a possibility.
The Fed cuts rates by 25 bps and also maintain future rate cuts expectations high by making less mentions of tariffs and inflation to focus more on the Labor picture.
Stocks race higher, particularly debt-heavy sectors like Industrials, which may take the Dow Jones to outperform.
Expect All-time highs across all names and a much lower US Dollar.
The balanced Case – No cut but dovish communications
The Fed holds rates to current levels but hint at cuts in 2026 as tariff-led inflation confirms to not increase.
Powell makes mentions of a weakening Labor market, implying cuts throughout 2026 as tariff-led inflation becomes more clear.
Expect stocks to selloff initially before rallying to their recent highs – This scenario will also put a LOT of emphasis on future CPI data.
The bearish case – The Fed cuts but signal less cuts in 2026
The Fed cuts but shows less intent to cut in 2026, with communications on a “Risk-Management” cut as labor markets shows some weakness but is still far from bad.
Dot plots point to less needs for cuts in 2026 which will trigger fears in a very optimistically-priced Stock Market.
Later data, particularly if it comes weaker, should add back cuts in the curve and lead to a rebound in the Market.
But some pain may come first in such a scenario.
Stock Indexes Charts and Trading Levels
Dow Jones
Dow Jones technical levels of interest:
Resistance Levels
- Current All-time high 48,459
- Psychological resistance at 48,000 +/- 100 pts (immediate test)
- Weekly highs 48,131
Support Levels
- Key Pivot zone 47,500 – 47,650 (Recent bounce)
- Higher timeframe Support 47,000 to 47,200
- 46,000 +/- 300pts Key Support
- August highs and November Lows 45,715
- 45,000 psychological level (next support and main for higher timeframe)
Nasdaq
Nasdaq technical levels of interest:
Resistance Levels
- intermediate resistance 25,700 to 25,850 (recent highs)
- All-time high resistance zone 26,100 to 26,300
- Current ATH 26,283 (CFD)
Support Levels
- Major Pivot 25,500 +/- 75 pts
- Support 25,000 to 25,250
- 24,500 Main support and Pivot (recent rebound)
- October and November lows just below 24,000
- Early 2025 ATH at 22,000 to 22,229 Support
S&P 500
S&P 500 technical levels of interest:
Resistance Levels
- 6,930 (current All Time-Highs)
- Weekly highs 6,896
- Resistance 6,850 to 6,880 (testing)
- ATH Resistance 6,900 to 6,930
Support Levels
- 6,800 Psychological Pivot
- Support 6,720 to 6,750 and 8H MA 50
- 6,490 to 6,512 Previous ATH October lows (recent lows)
- 6,400 psychological support
Safe Trades!
Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier
Opinions are the authors’; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.
