S&P 500 soars to new record highs after subdued US inflation data

  • The S&P 500 hits a new all-time high of 5,651 amid a volatile session.
  • The US Consumer Price Index rose to 3.0% year-over-year in June, up from 3.3% in May.
  • Jobless claims rose by 222,000, lower than the 236,000 estimated by analysts.

The S&P 500 hit a daily low of 5,622 during the European session, finding buyers who pushed the index to fresh all-time highs of 5,651 on the release of US inflation data. At the time of writing, the index is trading at 5,632, gaining 0.03% on the day.

US inflation data eases, raising chances of September rate cut

The US Consumer Price Index (CPI) fell by three-tenths of a point to 3.0% in the year-on-year reading in June, improving on the 3.1% expected by the market and its previous record of 3.3% for May. This result had not been seen since July 12, 2023. Core inflation, which excludes food and energy, stood at 3.3%, improving on the previous and estimated 3.4%.

On the other hand, weekly applications for unemployment benefits increased by 222,000, falling short of the consensus estimate of 236,000 and falling below the 239,000 of the previous week.

Based on these results, the FedWatch tool indicates an 81.3% probability of placing the interest rate within a range of 5.0% and 5.25% for the meeting on September 18.

Technical levels in the S&P 500

We see the first support at the 5,600 area, close to the 9-period Moving Average. The next support is at 5,550, the July 5 low in convergence with the 50% Fibonacci retracement. The nearest resistance is projected at 5,775, given by the 161.8% Fibonacci extension.

S&P 500 4-hour chart

Source: Fx Street

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