Vietnam Insight

The Fed keeps interest rates unchanged. US stock futures edged lower Wednesday evening ahead of Thursday’s market closure for Juneteenth. During the regular session, the Dow Jones and S&P 500 slipped 0.1% and 0.03%, respectively, while the Nasdaq Composite gained 0.13%. The moves came after the Federal Reserve held interest rates steady, with Chair Jerome Powell striking a cautious tone amid rising geopolitical and economic uncertainty. Powell reaffirmed a data-dependent approach, pointing to unclear inflation impacts from President Trump’s tariffs and the risk of stagflation. Fed projections now include two rate cuts in 2025, alongside downgraded growth expectations and higher inflation forecasts. Investor sentiment was further dampened by escalating tensions in the Middle East, as the ongoing Israel-Iran conflict stoked fears of deeper US involvement. Seven of the 11 S&P 500 sectors ended the day in the red, led by declines in energy, while technology outperformed.

Resistance around the recent peak. VNINDEX closed at 1,346.83 (down 0.86 points, -0.06%), with liquidity at its 20-day average. The market saw 108 gainers and 184 decliners, with the real estate and oil & gas sectors contributing positively to the market. The stocks contributing most significantly to the market's gains were VHM, GAS, and TCB, while VCB, FPT, and VPB were the main contributors to the market's decline. Foreign investors net sold VND 271 billion, primarily concentrating on FPT and VCI.

Trading Strategy: Investors are temporarily holding off on buying stocks that have already seen strong gains, as capital may shift toward stocks trading below their 200-day or 50-day moving averages. For new buying positions, priority can be given to real estate and banking stocks that are trading at low levels with a consolidation base; however, the allocation should remain modest