S&P 500 Triangle Faces Its FOMC Test

The S&P 500 enters this week’s Federal Reserve decision trading inside a broad consolidation pattern, with investors balancing softer inflation data against renewed pressure from higher energy prices.

The FOMC meets on 28–29 July, with its decision due on Wednesday. The broad economist consensus remains for the Fed to leave rates unchanged at 3.50%–3.75%. A Reuters survey found that all 104 economists polled expected no change, although market pricing has become less certain.

Fed funds futures currently imply roughly a one-in-three chance of a 25-basis-point increase. That probability has risen sharply as oil prices and inflation risks have returned to focus, even though June’s softer inflation report supports waiting until a later meeting.

The decision itself may therefore be less important than Chair Kevin Warsh’s press conference. Markets will be listening for whether the Fed still views higher energy prices as temporary or whether officials are preparing investors for a possible September hike.

SPX: Triangle nearing its decision point

Technically, the S&P 500 appears to be forming a broad triangle between 7,581 resistance and a rising support area around 7,294–7,312.

For now, price remains inside that structure, meaning volatility around the announcement could initially produce sharp moves in both directions without establishing a genuine trend.

A sustained break above 7,581 would invalidate the consolidation to the upside and indicate that buyers have absorbed the recent uncertainty. That would reopen the path towards the previous highs around 7,600, followed by a potential continuation higher.

On the downside, a hawkish surprise—or guidance suggesting that a September increase is becoming more likely—could push the index towards its rising support zone. A confirmed break below 7,294 would damage the triangle and suggest that the broader correction is deepening.

Traders should be cautious of the initial reaction. The more meaningful signal may come after the press conference, once the S&P 500 either holds outside the triangle or moves back inside it following a false breakout.