Key Points
- S&P 500 trades at 6,383.08, up 0.10%, with support at 6,012.55 and resistance at 6,439.58.
- Traders price in at least two US rate cuts for 2025, but CPI data could shift expectations.
The S&P 500 index is trading at 6,383.08, up 6.43 points or 0.10%, maintaining upward momentum after recovering from the April low of 4,802.15.
The daily chart shows price action consolidating between the 5-day and 30-day moving averages, with support at 6,012.55 and resistance at the July high of 6,439.58.
The MACD lines remain above the zero mark but are showing signs of flattening, indicating the market is in a holding pattern ahead of critical macroeconomic data.
Globally, sentiment has been mixed. Asian equities rallied after President Donald Trump extended the US-China tariff truce by 90 days, preventing triple-digit levies on Chinese goods. This boosted Japan’s Nikkei to an all-time high and lifted European markets modestly.
However, traders remain cautious as US CPI data later today could directly impact Federal Reserve policy expectations. A reading above consensus would challenge the current market view of at least two rate cuts in 2025 and could undermine risk assets.
Concerns about stagflation are resurfacing after the weak US jobs report on August 1 and continued inflationary pressures reported by businesses. US Treasury yields reflect this cautious tone, with the 10-year yield steady at 4.279% and the 2-year yield slightly higher at 3.764%.
Rate cut expectations, strong tech earnings, and the ongoing tariff reprieve have kept the S&P 500 and Nasdaq 100 near record territory. However, market volatility could rise if CPI data disrupts the prevailing narrative of monetary easing.
A softer inflation print could push the S&P 500 above the 6,439.58 resistance, potentially targeting the psychological 6,500 level. Conversely, an upside surprise in inflation could trigger profit-taking, pulling the index back toward the 6,012.55 support zone.
Cautious Forecast
If CPI aligns with or falls below forecasts, bullish momentum could carry the S&P 500 toward new highs. A hotter-than-expected print risks a retracement toward the 6,100–6,000 range as rate cut bets are reassessed.
