S&P 500: Inflation and Volatility on the Road to New Highs

11 oct.

The recent release of the U.S. Consumer Price Index (CPI) showed that core inflation unexpectedly rose from 3.2% to 3.3% in September, raising concerns about a possible reaction from the Federal Reserve (Fed). Investors fear that this increase could pressure the Fed to adopt a less dovish stance, even if that means hurting the labor market and the broader economy. The market reacted in a mixed fashion. The S&P 500 closed slightly down 0.21%, after a session marked by hesitation and volatility. However, despite weak employment data and high inflation, US futures showed a slight uptrend, suggesting that the market is not yet convinced of a radical change in Fed policy. In the bond market, two-year bond yields rose above 4%, while the dollar index ended the day virtually unchanged.

Today's Economic News in the U.S.
Several key U.S. reports are expected today, which could impact all three indices. Notable among them are the New York State Manufacturing Index, the NOPA Crush Report, and Consumer Inflation Expectations. There will also be bond auctions, and investors will be watching for comments from Fed member Philip Kugler.

Dow Jones Industrial Average (DJI): The Dow Jones fell 0.14%, affected by losses in sectors such as telecommunications and industry. Among the most affected, Boeing fell 1.84% and Home Depot lost 1.47%. On the other hand, Amazon rose 0.80%.
S&P 500: The S&P 500 also posted losses of 0.21%, with sectors such as energy and technology showing large fluctuations. CrowdStrike Holdings rose 5.58%, while First Solar fell 9.29%.
Nasdaq Composite: The Nasdaq retreated just 0.04%, driven by the positive performance of BloomZ Inc. which rose an impressive 87.36%, although JetAI fell 11.77%.

Looking at the S&P500 (Ticker AT: USA500), the index has moved sideways since June 17, on September 19 it pierced double price resistance. On the other hand the long term channel tells us that it has moved through the mean of the channel on the upside. Its RSI is 60.79% and the Check Point is around 5476 points. If we look at the cross of averages, the 200 average is below the 100 and 50 averages. The bolinger bands seem to be narrowing which may show a possible bullish continuation signal towards the high of 5800 points.

Ion Jauregui - ActivTrades Analyst





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