DAX and S&P 500 Bounce Ahead of Fed Decision and Tech Earnings

The DAX and S&P 500 posted solid gains on Monday as oil prices retreated roughly 1.5% following reports of Qatari mediation efforts with Iran. The relief in energy markets handed equities a reprieve after Friday's selloff, when Brent had touched six-month highs near $117 per barrel. By midday trading the DAX stood at 25,450.73 (+1.07%) and the S&P 500 at 7,654.56 (+0.41%), yet both indices remain trapped inside broader ranges and well below their summer peaks. The US ten-year yield holding near 4.97% and a dollar index around 101.5 keep sentiment fragile, and traders are bracing for a week that could reset the outlook for rates, inflation and technology valuations.

The bounce is a technical reprieve rather than a trend change. Friday's losses—1.24% on the Dow and 0.52% on the S&P 500—marked a second consecutive weekly decline for US equities, driven by fears that persistently high energy costs would force central banks to tighten further. European markets outperformed on Monday as calmer French bond conditions and the drop in crude supported risk appetite, but the rally faces immediate tests from corporate earnings and monetary policy decisions that arrive in quick succession.

What the calendar says

Wednesday 28 October at 18:00 UTC brings the Federal Reserve's rate decision. Markets price a hold at 3.75–4.00% with roughly 90% probability, yet any hawkish tilt in Chair Warsh's press conference would revive expectations for a December hike and lift Treasury yields further. The decision lands hours before Microsoft and Alphabet report quarterly results, setting up a volatile evening session that will test whether cloud revenue and artificial intelligence spending can justify elevated valuations.

Thursday 29 October at 12:30 UTC the Bureau of Economic Analysis releases advance third-quarter GDP alongside September personal consumption expenditure inflation. Consensus looks for growth near 3.2% annualised, and a hot core PCE print would strengthen the case for further Fed tightening. At 12:15 UTC the same day the European Central Bank announces its policy decision, with President Lagarde's guidance critical for the DAX given renewed energy-driven inflation risks. Amazon reports after the US close Thursday, rounding out the trio of mega-cap technology earnings.

Friday 30 October sees the Bank of Japan's decision, widely expected to hold rates steady at 1.25% after September's hike, though any signal on December policy will move currency markets and feed through to European and US indices. Our full schedule sits on the economic calendar.

S&P 500: testing support above 7,605

The index trades just above its 7,605 rising average, which has contained pullbacks since late July. The hourly chart shows price holding a channel floor near 7,490, yet the 7,697 and 7,726 averages cap overhead and the relative strength index at 45.22 sits below its signal line. A daily close above 7,726 would open a run toward 7,850 and the upper channel boundary near 7,980. Support lies at 7,605 then 7,480; a break below 7,520 on an hourly close would negate the constructive bias and expose the October low zone.

DAX 40: pinned at channel resistance

The DAX sits right on its 25,455 average and is testing the roof of a falling channel that has capped rallies since the late-August high near 26,500. Price at 25,450.73 matches the average almost exactly, with the channel roof and supply zone extending from 25,600 to 25,650. The relative strength index at 51.21 has crossed above its signal line, a modest positive, but the index needs a daily close above 25,650 to break the downtrend and target 26,200. Support rests at 25,280 and then 24,750, levels that would come into play on any disappointment from the ECB or a hawkish Fed surprise.