Last Friday, US equity indices closed mixed. The S&P 500 edged down 0.05%, while the Nasdaq 100 gained 0.49%. The Dow Jones Industrial Average slipped 0.49%.

At the start of this week, the indices remain close to all-time highs, as investors focus on the upcoming Federal Reserve decision on monetary policy. The global equity index held steady after closing at its highest on Friday. The MSCI Asia Pacific Index pared gains after briefly closing above its previous record from February 2021. Chinese indexes advanced 0.4%, despite weak data on manufacturing and consumption. French 10-year bond futures fell after Fitch Ratings downgraded France's credit rating from AA- to A+.

The key question for investors this week is whether Fed officials will push back against market expectations for a series of rate cuts that many economists anticipate will extend through next year. The Fed's decision on Wednesday will set the tone for global markets, but it is not the only major event on the calendar. The Bank of Canada, Bank of England, and Bank of Japan are also due to announce monetary policy decisions, making this a pivotal week for central banks worldwide.

In China, economic activity slowed for a second straight month, outpacing expectations due to a sharp drop in investment. August data from China offers little encouragement: exports remain under pressure from tariffs, and a slump in the property market continues to weigh on domestic demand. Still, markets seem to be ignoring these signals: households with cash on hand are returning to equities, while the artificial intelligence boom is fueling tech stock gains. Liquidity inflows from Chinese households, combined with AI-related momentum, are feeding a self-fulfilling prophecy. Rising tech valuations are attracting new investors, who in turn drive prices even higher. However, such euphoria is unlikely to last.

It is clear that Chinese authorities will have to take more decisive measures to stimulate the economy and restore confidence among larger investors. If negative trends persist, even robust growth in artificial intelligence will not be enough to compensate for underlying fundamental issues. More aggressive fiscal policy may be needed to support domestic demand and boost infrastructure investment. Otherwise, a bubble in Chinese equities could burst, carrying serious consequences for the global economy.

From a technical standpoint, the immediate task for S&P 500 buyers today will be to overcome the nearest resistance at $6,590. Breaking through this level would enable further growth and open the way to the next target at $6,603. Equally important is maintaining control above $6,616, which would further strengthen the bull case. If risk appetite wanes and the index moves lower, buyers will need to defend the $6,577 area. A break below this support would quickly send the index back to $6,563 and open the path toward $6,552.