S&P 500 slightly up above 4,100 amid cautious optimism

• The S&P 500 remains trapped within the range of the last 5 days.
• Concerns about the US banking sector and the country’s debt ceiling weigh on sentiment.
• There is some cautious optimism in the markets ahead of debt ceiling talks resuming on Tuesday.

He S&P 500 index remains indecisive within the range of the last 5 days during the European session on Monday. At the time of writing, the index is moving higher around the level of the 4,140 pointsrising more than 0.50% on the day, amid cautious optimism in markets.

The S&P 500 closed last week in negative around the 4,122 point level, after bouncing on Friday from the weekly low region just below 4,100 points after the publication of consumer confidence data from the University of Michigan.

Data showed on Friday that the consumer sentiment index fell in May flash reading, standing at 57.7 and below the 63.5 points of April. The result came below the 63 points expected by the market. Besides, the 5-year consumer inflation expectations component rose to 3.2% from the previous 3%, the highest level seen since 2011.

These mixed data cast doubt on the next steps in the monetary policy of the Federal Reserve (Fed), since while the general Consumer Price Index (CPI) and producer inflation decrease slightly, core CPI inflation as well as consumer inflation expectations continue to rise.

Having said that, Philip Jefferson and James Bullardof the Fed, made comments over the weekend where they defended the Federal Reserve’s current monetary policy and cited high inflation.

Added to all this are concerns about the US banking sector and the country’s debt ceiling. Regarding the latter, the Congressional Budget Office (CBO) anticipates that, if the debt limit is not modified, “there is a significant risk that, at some point in the first two weeks of June, the Government will no longer be able to pay all its obligations”. US President Joe Biden expects talks with congressional leaders to continue on Tuesday.

In today’s economic data, the New York Fed’s Empire State Manufacturing Index is expected to fall to -2.5 from 10.8 the previous month, anticipating a decline in manufacturing output in the region. In addition, FOMC members Bostic, Kashkari, Barkin and Cook are scheduled to speak.

These data or comments made are highly unlikely to be a market mover for the S&P 500, so the index will continue to move on its cautious optimism.

Technically, the S&P 500 remains within the range of the last week before the market opens on Monday. Looking down, initial support will be at the lows from last week just below the US levels. 4,100 points. A break of that level could point to the area of ​​recent lows near the 4,060 points.

Looking up, the index could find initial resistance at Friday’s highs at 4,150before aiming for weekly highs of 4,157. An improvement in sentiment leading to a break of that level could lift the index towards the area of ​​recent highs around the 4.170-4.175.

S&P 500 daily chart

S&P 500 additional technical levels