S&P 500 price may rally to a new historic high

S&P 500 price news, and analysis

• All eyes on the upcoming data
• S&P500 price may rally to a new historic high

In his Jackson hole speech last week, the Fed Chair Jerome Powell indicated that the central bank is ready to initiate a cycle of interest rate reductions, though he did not clarify the potential size of the cut expected at the upcoming September meeting.

The market is now speculating whether the Fed will opt for a 25 or 50 basis point rate cut in September, with the decision likely to hinge on forthcoming economic data. Key factors will include inflation and job market reports. This week, attention will be focused on the Personal Consumption Expenditures rates, the Fed’s preferred measure of inflation. The YoY PCE is anticipated to stabilize at 2.5%, while the YoY core PCE may increase from 2.6% in July to 2.7% in September. Additionally, the U.S. Non-Farm Payroll report, due on September 6th, will be closely watched. The previous NFP report revealed a significant decline in the U.S. job market, heightening fears of a recession. This initially led to a market sell-off, but the market later rebounded as subsequent data suggested that a recession was not imminent.

In summary, a 25-basis point rate cut appears to be the most likely outcome for the Fed. However, if upcoming inflation data falls short of expectations, combined with further weakening in the U.S. job market, a 50-basis point cut could become a more likely scenario.

S&P 500 Price Daily Chart

Chart Source: ADSS Platform

In mid-August, the S&P 500 closed above the 50-day simple moving average, suggesting a potential resurgence of the potential resurgence of bullish momentum. Currently, the price appears to be approaching a test of the July 16 high at 5,669, with a possible move towards the high end of the current trading zone spanning between 5,562 and 5,700. A daily close above this level opens the door for a further rally toward the 5,800 mark. If this happens, the resistance level located at 5750 should be considered.

Conversely, a daily close below the low end of mentioned trading zone suggests a weakening bullish trend, potentially leading to a downward correction toward 5,446. In this scenario, the support level at the 50-day simple moving average should be closely monitored.