Now that the Fed has provided clarity, investors seek further gains following a successful week.

• The Fed's decision to raise interest rates and predict future hikes provided clarity for markets.
• The stock market experienced a significant surge, particularly in growth and tech companies, and experts are closely monitoring whether this trend will persist in the upcoming week.
• Although the economic and earnings calendars are relatively light, there are approximately six Fed speakers, including Fed Chairman Jerome Powell.
• One strategist stated that the market and investors can focus on earnings since the rates are not being increased at a high enough rate to negatively impact the market.

The Federal Reserve's first rate hike has sparked debate among market professionals about the sustainability of the market's recent upward trend.

The stock market experienced its best week of the year, with a powerful rally in technology and growth stocks. The rose by 6.2%, ending at 4,463. The increased by 8.2%, and the gained 5.5%.

The consumer discretionary sector experienced the most significant growth, increasing by more than 9%, while technology stocks also performed well, rising approximately 7.8%. In contrast, the energy sector was the only major sector to decline, falling 3.6%.

Despite being among the most punished airlines, they experienced a 14.7% growth during the week. Additionally, high-growth names also rebounded, with the poster child for growth achieving a 17.4% increase. However, the fund is still down more than 46% over the last six months.

The focus on Ukraine may continue to cause headlines and volatility in the coming week, while investors are closely monitoring the spread of Covid, which has resulted in shutdowns in Chinese cities and is increasing at a higher rate in Europe.

Jerome Powell, the Fed Chairman, will deliver speeches at an economics conference on Monday and an international banking conference on Wednesday. The economic calendar has only a few events, including the release of durable goods, services, and manufacturing PMI on Thursday.

The anticipation of the first rate hike caused more harm than the rate hike itself, as we became tangled in a knot starting in December with the Fed's pivot from transitory inflation to tapering bond purchases. However, this issue is now in the past, and the impact of any Fed speaker's parade will be diminished.

Despite hawkish comments from St. Louis Fed President James Bullard and Fed Governor Christopher Waller on CNBC, the market disregarded their desire to raise rates faster than the median seven hikes the Fed anticipates this year.

The Fed raised its fed funds target rate range by a quarter point to 0.25% to 0.50% on Wednesday, marking its first rate hike since 2018. Additionally, the Fed announced that it plans to start reducing its nearly $9 trillion balance sheet at an upcoming meeting.

In the past week, tech and growth stocks performed well, but they are the most affected by higher interest rates. These stocks are typically priced higher because investors purchase them for their expected future earnings, and easy money makes them highly appealing.

Some strategists believe that technology can still perform well in a rising rate environment, as some of the excesses have been removed from the sector. However, they may not maintain their previous dominance.

Looking past the Fed

Julian Emanuel, head of equities, derivatives and quantitative strategy at Evercore ISI, stated that the Fed has set the stage for investors to focus on earnings again. He added that earnings estimates since the beginning of the year have risen.

Emanuel anticipates the market will likely continue to increase in the short term, as long as geopolitical tensions do not intensify. Although oil prices may have reached their peak, it remains uncertain whether the stock market has hit its bottom for the year.

Emanuel stated that sentiment is dreadful, and although investors can now disregard the Fed's rate hike cycle, they still believe it will lead to higher share prices in the near future.

We are aware of the upcoming events, including the 0.25% increase in May and the commencement of quantitative tightening at mid-year. However, we believe that the rate hike will not significantly harm the market, allowing investors to concentrate on earnings once again. Our forecast predicts a 9.3% increase in S&P 500 profits for this year.

According to Hogan, the market is inclined towards a positive outcome for Ukraine, such as a ceasefire, but there are no indications that an end is imminent.

If the market does not recalibrate, it will have to wait for weeks rather than months for this to end.

This is what the stock charts say

T3Live.com partner Scott Redler concentrates on the market's short-term technicals and predicts that after a strong performance, the market may absorb some of its gains early in the week.

Most active traders are reducing risk into the 4,400 level of the S&P 500, not adding to it, according to Redler. If we can digest a day or two after quadruple witching, it might give us some signals that this trend could continue towards 4,600. The quadruple expiration of options and futures was on Friday.

Redler stated that Russia's conflict in Ukraine and the tightening of Fed policy will continue to impact the market, potentially keeping the S&P 500 within a range. He believes that the market is unlikely to return to its all-time highs soon and is currently in a neutral position, neither short nor long. Redler predicts that the market will digest the current situation in the coming week. Additionally, he believes that oil has reached its peak for the year, which could be beneficial.

Earlier this month, oil briefly reached $130.50 per barrel due to concerns about sanctions on Russia affecting its oil exports and causing major shortages. However, since then, oil has decreased and was trading at approximately $105 per barrel on Friday.

Redler stated that a crucial test for the S&P 500 is to maintain the upper third of its range and remain above 4,330. If it does so, the next move may be upward, indicating a commitment to the actions taken this week.

Redler stated that technology shares made a strong comeback, and he is watching to see if they continue to lead. He said that a group of tech names broke their downtrends, including Tesla, and NVIDIA. Redler added that Tesla and have been buyable on dips, and NVIDIA gave clues that the bounce was as believable as it was because it was one of the first stocks to cross its downtrend line.

In the upcoming week, both higher stock prices and increased consumer spending could significantly influence market trends.

Redler stated that Apple and Microsoft haven't been a significant factor in the broader indices, neither positively nor negatively. If they could outperform slightly, they could help the broader indices. He explained that the two largest stocks by market cap had large sell imbalances during the quadruple witching expiration, which caused them to lag behind the Nasdaq's gains.

Redler stated that the largest buybacks in the stock market are associated with the greatest selling imbalances.

Week ahead calendar

Monday

Earnings: Tencent Music

8:00 a.m. Atlanta Fed President Raphael Bostic

12:00 p.m. Fed Chairman Jerome Powell keynote at the NABE Economic Policy Conference

10:00 a.m. QFR

Tuesday

Earnings: Poshmark

10:30 a.m. New York Fed President John Williams

2:00 p.m. San Francisco Fed President Mary Daly

5:00 p.m. Cleveland Fed President Loretta Mester

Wednesday

Earnings: Winnebago, Tencent Holdings, Steelcase

8:00 a.m. Fed Chairman Powell at Bank for International Settlements virtual summit

10:00 a.m. New home sales

11:25 p.m. San Francisco Fed’s Daly

Thursday

Earnings: , FactSet, NIO

8:30 a.m. Minneapolis Fed President Neel Kashkari

8:30 a.m. Initial claims

8:30 a.m. Durable goods

8:30 a.m. Current account

9:10 a.m. Fed Governor Christopher Waller

9:45 a.m. Manufacturing PMI

9:45 a.m. Services PMI

9:50 a.m. Chicago Fed President Charles Evans

10:00 a.m. New home sales

11:00 a.m. Atlanta Fed’s Bostic

Friday

10:00 a.m. New York Fed’s Williams

10:00 a.m. Pending home sales

10:00 a.m. Consumer sentiment

11:30 a.m. Richmond Fed President Tom Barkin

12:00 p.m. Fed Governor Waller