S&P 500 eek head prediction. bullish momentum fades the S&P 500 pivots lower and stops at resistance and bears take hold
S&P 500 and Nasdaq 100 climb, but the uptrend starts to wane
The S&P 500 and Nasdaq 100 both had a good but ordinary week. Rising 0.79% and 0.13%, in the course of the previous five trading sessions. The bullish momentum appears to be waning as concerns about the Fed’s monetary policy path resurface, compromising confidence on Wall Street, despite the fact that both indices had mounted a strong rally since the middle of last month.
S&P 500 and Wall Street still unclear on Fed’s next move
When the turmoil in the U.S. banking sector was in full force a few weeks ago. The traders quickly increased their wagers that the Fed bank would end its rate-enforcing effort soon and start to ease policy shortly after. There is no question that the FOMC’s cycle of rate increases is about to come to an end. But it is unclear whether officials will soon begin to reduce borrowing costs.
When the turmoil in the U.S. banking industry was in full force a few weeks ago. The Markets quickly increased their wagers that the central bank would end its hardening effort soon and start to loosen policy shortly after. There can be little doubt that the FOMC’s cycle of rate increases is about to come to a finish, But it is unclear if officials will soon begin to reduce borrowing costs.
SP 500 Implied Volatility
Source: TradingView
Since the possibility of multiple rate cuts in the second half of the year has boosted sentiment and kept markets buoyant. Since the middle of last month, stocks are going to struggle and have fallen sharply. If interest rate expectations become consistently less dovish. Due to this, it’s possible that the S&P 500 and Nasdaq 100 will both continue to be at risk and susceptible to short-term losses.
Technical analysis of the S&P 500
Technically speaking, the S&P 500 swung lower heading into the weekend after failing to conquer clustering resistance in the 4,165-4,195 spectrum, Which is where the peaks from June 2022 and February 2023 merge. Along with a medium-term rising trendline which has stayed in effect for a period of six months. Initial support is at 4,075, followed by 4,040 if market weakness worsens in the coming days.
On the other hand, if the S&P 500 is able to continue its upward trend, the first resistance to watch is located between 4,165 and 2,195. A bullish move towards the 4,310 level, which equates to the 61.8% Fibonacci retracement of the 2022 decline. It would be possible if this technical barrier were to be overcome.
