The US 500 is in a strong bullish phase with record highs, supportive monetary policy, and robust macroeconomic and earnings backdrop. Technical conditions support the trend, but traders should be aware of potential short-term corrections due to overbought signals.The risk to reward profile favours buying dips rather than chasing highs, with strong support at 6,406–6,440 levels and upside targets above 6,500 if positive news persists. Traders should remain vigilant for volatility surges and sector rotations as August & September may bring more erratic price swings, but the fundamental and technical backdrop for the US 500 remains decisively positive.
Fundamental Analysis
Macro Drivers
Inflation & Fed Policy:
The latest July CPI showed headline inflation rising 0.2% MoM and 2.7% yoy, both below consensus forecasts. This has supercharged expectations for a Fed rate cut at the September meeting. CME FedWatch now shows a 94% chance of a rate cut, up sharply in recent weeks. This dovish monetary outlook is a primary tailwind driving new highs in equities.
Earnings:
Strong quarterly earnings, especially from tech and “mega cap” stocks, continue to buoy overall sentiment with all 11 index sectors ending yesterday in positive territory, with growth in technology (+1.6%), communication services (+1.9%), and financials (+1.2%).
Economic Growth & Sentiment:
Despite lingering macro and geopolitical risks notably tariffs and the ongoing global trade worries, recent economic data suggests resilience in consumer demand, supported by moderating inflation, soft labor market data, and improved business confidence. Defensive positioning earlier this year is giving way to more aggressive risk-taking.
Technical Analysis
Price Action & Levels
The US500 closed at fresh record highs of 6,445.76 yesterday, and during today’s intraday trading session it has pushed above 6,460 for the first time ever. Early trading today remains calm to bullish, with potential for further upside.
Breakout, recent action broke above key resistance at 6,406 and 6,440; these now form strong support zones for any pullbacks.
Channel & Trend, the US500 is trading in the upper half of a well-defined ascending channel. Short-term momentum is strongly positive, yet the RSI is nearing overbought territory, suggesting the risk of minor corrections or consolidation.
Fundamental Analysis
Macro Drivers
Inflation & Fed Policy:
The latest July CPI showed headline inflation rising 0.2% MoM and 2.7% yoy, both below consensus forecasts. This has supercharged expectations for a Fed rate cut at the September meeting. CME FedWatch now shows a 94% chance of a rate cut, up sharply in recent weeks. This dovish monetary outlook is a primary tailwind driving new highs in equities.
Earnings:
Strong quarterly earnings, especially from tech and “mega cap” stocks, continue to buoy overall sentiment with all 11 index sectors ending yesterday in positive territory, with growth in technology (+1.6%), communication services (+1.9%), and financials (+1.2%).
Economic Growth & Sentiment:
Despite lingering macro and geopolitical risks notably tariffs and the ongoing global trade worries, recent economic data suggests resilience in consumer demand, supported by moderating inflation, soft labor market data, and improved business confidence. Defensive positioning earlier this year is giving way to more aggressive risk-taking.
Technical Analysis
Price Action & Levels
The US500 closed at fresh record highs of 6,445.76 yesterday, and during today’s intraday trading session it has pushed above 6,460 for the first time ever. Early trading today remains calm to bullish, with potential for further upside.
Breakout, recent action broke above key resistance at 6,406 and 6,440; these now form strong support zones for any pullbacks.
Channel & Trend, the US500 is trading in the upper half of a well-defined ascending channel. Short-term momentum is strongly positive, yet the RSI is nearing overbought territory, suggesting the risk of minor corrections or consolidation.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.